As climate change becomes a growing concern for banking industry regulators, the European Central Bank (ECB) unveiled plans to factor climate considerations into its monetary policy.

The central bank said climate change will be incorporated into its corporate bond purchases, disclosure requirements and risk management.

“With these decisions we are turning our commitment to fighting climate change into real action,” said ECB president Christine Lagarde in a statement.

The ECB plans to gradually decarbonize its corporate bond portfolio by prioritizing issuers with better climate performance — defined as companies with lower greenhouse gas emissions, more ambitious carbon reduction targets and better climate-related disclosures — over companies with weaker performance “through the reinvestment of the sizeable redemptions expected over the coming years.”

The ECB expects to start adjusting its bond portfolio in October, and it pledged to start publishing climate-related information on its corporate bond holdings starting in the first quarter of 2023.

Additionally, the central bank will start limiting the share of assets issued by poor climate performers that can be pledged as collateral in borrowing from the central bank.

By decarbonizing its own portfolio, the ECB said it intends to provide incentives to companies — and financial institutions specifically — “to be more transparent about their carbon emissions and to reduce them.”

The ECB said the steps were designed to align with its primary objective of maintaining price stability. It said it’s committed to regularly reviewing these measures to ensure the bank is meeting both its monetary goals and climate objectives, and to reflect expected improvements in climate data.

The planned changes to the bank’ s monetary policy follow its incorporation of climate considerations into various areas of its operations including banking supervision, financial stability and economic analysis.