Injecting climate finance into SME lending in Germany: Opportunities for and limitations of regional savings and cooperative banks

Flögel Franz (), Schepelmann Philipp (), Zademach Hans-Martin () and Zörner Michael ()
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Flögel Franz: Westfälische Hochschule - Westphalian University of Applied Sciences Institute for Work and Technology Munscheidstr. 14 45886 Gelsenkirchen Germany
Schepelmann Philipp: Wuppertal Institute for Climate, Environment and Energy Energy, Transport and Climate Policy Döppersberg 19 42103 Wuppertal Germany
Zademach Hans-Martin: Catholic University of Eichstätt-Ingolstadt Department of Geography Ostenstraße 18 85072 Eichstätt Germany
Zörner Michael: Catholic University of Eichstätt-Ingolstadt Ostenstraße 18 85072 Eichstätt Germany

ZFW – Advances in Economic Geography, 2024, vol. 68, issue 2, 111-123

Abstract: Although small and medium-sized enterprises (SMEs) contribute considerably to Germany’s carbon emissions, regional savings and cooperative banks − SMEs’ most important financiers − hardly consider this aspect in lending to these businesses. However, given Germany’s commitment to climate neutrality by 2045, suitable approaches for injecting climate finance into these SME lending processes are greatly required. Against this background, the paper at hand aims to introduce the specific case of regional banks into the debate on green finance and green banking and suggest future research in this context. In discussing the state of research on the peculiarities of regional savings and cooperative banks, we outline the resulting opportunities and limitations for climate impact assessments in SME lending. We argue that while the dual bottom-line orientation of regional banks in Germany precludes them from applying simple positive or negative screenings, their in-depth knowledge about local clients and circumstances enables them to be active and engaging partners for the green transformation of SMEs. Nonetheless, we explain why developing solutions to utilise this knowledge for climate finance by integrating climate impact assessments into routine lending processes remains a particularly challenging task.

Keywords: regional banks; savings banks; cooperative banks; SME lending; climate finance; green banking; climate impact assessment; ESG ratings; Germany (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:zfwige:v:68:y:2024:i:2:p:111-123:n:1002

DOI: 10.1515/zfw-2022-0011

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