The European Central Bank is considering moving to the use of low-carbon benchmark indexes for fixed-income allocations within its staff pension fund.

The Frankfurt-based ECB last year replaced all conventional equity benchmark indexes tracked by the pension fund with low-carbon equivalents. The fund has €1.3 billion ($1.6 billion) in assets and €2.5 billion in obligations.

A spokeswoman said the size of individual allocations are not being disclosed.

The move “significantly reduced the carbon footprint of the equity funds. The ECB is exploring a possible expansion of the use of low-carbon benchmark indices to fixed-income asset classes within its pension fund,” a news release said Monday.

The bank also said it will use its €20.8 billion funds portfolio, which is made up of paid-up capital, the general reserve fund and provisions for financial risks, to invest in the euro-denominated green bond investment fund for central banks, introduced by the Bank for International Settlements.

The green bond fund invests in renewable energy production, energy efficiency and other environmentally friendly projects. The investment forms part of the ECB’s sustainable and responsible investment strategy, it said in the same news release.

Allocations to green securities already account for 3.5% of the bank’s funds portfolio allocations. Separately, the ECB said it has set up a climate-change center to bring together work throughout the bank on climate issues.

The new unit will be made up of about 10 staff members, who will work with existing teams at the bank. Unit employees will report to Christine Lagarde, ECB president.

Read more @Pionline