When Green Meets Green

Climate Change-Related Regulatory Risks and Bank Lending

“…The main goal set forward by the Agreement is to limit global warming below an average temperature increase of 2 • C, aiming at a maximum increase of 1.5 • C. Given the high uncertainty around whether an agreement can be achieved at the Paris Summit and the surprisingly ambitious extent of the final outcome, it seems unlikely that this event is anticipated. We argue that this event shifts banks' prevailing perceptions of transition risks, as recent evidence has shown to be the case (Bolton and Kacperczyk, 2020;Degryse et al, 2021;Delis et al, 2018;Kruse et al, 2020;Monasterolo and De Angelis, 2020;Seltzer et al, 2020). By updating their beliefs about these risks, banks may adjust their lending accordingly.…”

“…We argue that this event has raised public awareness of transition risks and may have shifted banks' prevailing perceptions of these risks (Bolton and Kacperczyk, 2020;Degryse et al, 2021;Kruse et al, 2020). Survey evidence from institutional investors presented in the paper by Krueger et al (2020) points to the recent increased attention to climate risks in investment decisions.…”

“…We use variation in environmental stringency within our two regions as a proxy for the financial risks associated with regulation. As an indicator of banks' preferences, we employ membership in the United Nations Environment Program Finance Initiative (UNEP FI) (Degryse et al, 2021). Our results indicate that the stringency of the existing regulatory environment is more important than banks' public commitments in driving lending behavior.…”

“…The literature on whether and how banks consider transition risks in their lending decisions is growing rapidly. Evidence suggests that banks charge higher interest rates to firms holding more fossil fuel reserves or with higher carbon emissions, while they give preferential terms to firms that voluntarily disclose environmental data (Chava, 2014;Degryse et al, 2021;Delis et al, 2018;Ehlers et al, 2021). However, the literature on how banks' awareness of transition risks changes their credit supply is scarcer.…”

L’integrazione dei fattori ESG nella valutazione del rischio di credito

“…Questi risultati sono in linea con Palea e Drogo (2020) 37 , i quali hanno verificato che le imprese dell'eurozona che partecipano al programma CDP, rendendo pubbliche le informazioni sulle emissioni, pagano uno spread inferiore sul debito. A conclusioni analoghe sono giunti Jung et al (2018) 38 , per il mercato australiano; Kleimeir e Viehs (2018) 39 con riferimento a un campione globale; Eliwa et al ( 2019) 40 per un campione di imprese europee; Degryse et al (2020) 41 utilizzando dati relativi a prestiti sindacati. Tali studi sono concordi nell'affermare che le imprese che migliorano i livelli di disclosure relativa al cambiamento climatico ottengono in media tassi di interesse inferiori sui prestiti.…”