ECB sparks staff revolt over ‘disrespectful’ approach to climate change

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European Central Bank staff are in revolt over the board’s approach to climate change after an executive said new recruits had to be “reprogrammed” to ensure they support its green policies.

The ECB’s staff committee has called for president Christine Lagarde and her top team to rethink their management style in a letter, seen by the Financial Times, which complains about the “disrespectful” comments made by an executive board member at a meeting last month. 

The move highlights rising dissent among ECB staff against their bosses, who have made tackling the risks of climate change a priority for the central bank.

Frank Elderson, who joined the ECB in late 2020, told the internal meeting: “Why would we want to hire people whom we have to reprogramme because they came from the best universities but they still don’t know how to spell the word ‘climate’.”

The staff representatives said “many colleagues were shocked by the choice of words and the viewpoints of Mr Elderson” and that the idea of “reprogramming” people was “in direct contradiction to the democratic values the ECB and EU stand for”.

“We would encourage the executive board to reflect on their leadership style and to acknowledge that people in democratic societies shall not be ‘reprogrammed’ but convinced by reasoning and facts and leading by example,” said the letter, which was shared with ECB staff on Monday.

The ECB, which is set to keep its key eurozone interest rate unchanged at its meeting on Thursday, said Elderson was “a staunch supporter” of all forms of diversity.

“His message that climate science should be considered in the ECB’s work directly reflects the bank’s strategy,” it said, adding that his colleagues on the executive board shared his views “that all factors affecting the ECB’s mandated tasks should be properly understood”.

More than half of ECB staff, responding to a survey by its main union this year, said Lagarde was performing poorly and almost six in 10 said they had no trust in her or the board.

Elderson’s comments, first reported by Politico, have also caused a political stir. The European parliament last week called on the ECB to investigate his statement and to “swiftly address any suspicions of ideological bias” in a resolution it passed on the central bank’s annual report.

MEPs expressed their “grave concern” about his comments, called for the ECB to have “an undeterred focus” on its primary mandate of price stability — defined as inflation at 2 per cent — and stressed “the importance of pluralism for the ECB’s institutional culture”.

Lagarde said in response to questions from MEPs about Elderson: “While I completely support all my colleagues, including the one you referred to, I realise sometimes words can go a little bit beyond the passion that underlines what they express. 

“Trust me that diversity will not be diluted by the passion of something that is critically important and impacts on our activity,” she said.

Lagarde has increased the ECB’s efforts to tackle the risks of climate change, adjusting its collateral rules and bond reinvestments to take account of green factors and setting up an internal climate hub.

While some central banks such as the US Federal Reserve have taken a cautious approach, Elderson has made the issue a major focus in his role as vice-chair of the ECB’s supervisory board, which oversees the eurozone’s biggest banks. 

The Dutchman recently warned 20 banks that the ECB would impose daily fines if they did not start to assess and tackle climate risks soon. He also said the ECB should consider a green shift in both its €4.7tn bond portfolio and in its cheap financing for commercial banks.

The nine-member staff committee, which is elected by all employees, said: “Many colleagues individually support the ECB’s decision to include climate change into the ECB’s mandate.” But it added there were “good reasons to question the legitimacy of the ECB to self-extend the boundary of its own mandate without any amendment of the legal framework and based on the opinions of its leadership”.

Its letter compared the ECB’s approach to climate change with topics such as immigration and geopolitical conflicts, saying the ECB should strive for diversity of thought “instead of having one-sided views unilaterally imposed from the top to the bottom”.

It added that Elderson’s comments followed “other public statements made by executive board members which were perceived as disrespectful towards the ECB’s staff”.

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