The European Central Bank said on Tuesday it plans to set emission reduction targets for its vast corporate bond portfolio and could even sell some assets if it fails to meet its targets.

The ECB holds about €350-billion ($376-billion) worth of corporate debt, purchased as part of a massive stimulus scheme over the past decade, and has been pushing companies included in this vast portfolio to become greener.

It tilted reinvestments in its now mothballed Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP) towards greener issuers.

But fresh purchases have long been stopped and even the last of the reinvestments stop at the end of this year.

This is forcing the ECB, which is also pushing banks to disclose more of their climate-related risk, to find a new tool to encourage corporate participation.

“Interim emission reduction targets will be set for the corporate portfolios in the APP and PEPP,” the ECB said, adding that EU regulations will be used as guidance in setting goals.

“If deviations from the desired trajectory are identified, remedial actions will be assessed, within our mandate, on a case-by-case basis,” the ECB added.

The plan was approved by policy-makers recently but they did not set a time frame for the process and a fresh decision will be needed before this takes effect.

The ECB added that the climate footprint of the portfolio is largely outside its control and depended on individual firms’ performance, market conditions and bond issuance patterns.

This is why the Governing Council would regularly review the portfolio’s performance and the required action, it said.

The central bank did not provide any detail on what specific action it may take or whether such decisions would be made public, however the ECB’s usual practice would normally include outright divestment among its options.

The ECB says its corporate bond portfolio is shrinking quickly as debt expires and it could fall by about €40-billion in the next year.