Recital 4

(4)The incorporation of climate change considerations into the benchmark allocation, together with the introduction of maturity limits for bonds of issuers with a poorer climate performance, also further support the proportionality of the CSPP as they mitigate the expected longer term climate-related risk for the Eurosystem arising from its corporate asset purchases, thereby ensuring the CSPP does not go beyond what is necessary to achieve its objective. In addition, the tilting methodology for the CSPP benchmark is designed to itself be proportionate. It takes into account three objective categories of metrics related directly to emissions and thus climate-related financial risk and climate neutrality: first, an issuer’s past carbon emissions; second, forward-looking climate metrics, such as whether issuers have in place ambitious and credible decarbonisation targets, assessed using adequate methodologies; and third, the quality and completeness of issuers’ climate disclosures and the verification of such disclosures by third parties. Moreover, the design of the climate scoring methodology takes into account, as guidance, the provisions on the requirements for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks under Regulation (EU) 2016/1011 of the European Parliament and of the Council ⁴ . Finally, the climate scoring methodology will be reviewed and updated, as needed, to reflect the increasing availability of climate data and models, as well as relevant regulatory developments and the advancement in risk assessment capabilities, such as through the climate stress tests of the Eurosystem balance sheet.