Banking sustainability in a large emerging economy: Focus on Brazilian banks

Claudio Oliveira de Moraes, Leonardo Vieira Cunha and Juan Camilo Galvis-Ciro
Authors registered in the RePEc Author Service: Juan Camilo Galvis Ciro, Sr. ()

Journal of Economics and Business, 2024, vol. 132, issue C, No S0148619524000493

Abstract: This study investigates the exposure of Brazilian banks to sectors with a higher sensitivity to climate-related risks. For this purpose, by aligning the novel Sectoral Environmental Risk Index with the International Finance Corporation’s methodology, this research empirically analyzes more than 90 % of Brazilian banks’ credit data. The main objective is to determine whether Brazilian banks expand their portfolios toward environmentally friendly sectors. Based on the findings, there is a positive association between growth credit and portfolios in such sectors, with a persistent effect over time. The results also provide valuable insights for policymakers and stakeholders aiming to foster sustainable finance practices by challenging the access to credit for polluting economic sectors.

Keywords: Climate Change; Banking sustainability; Credit (search for similar items in EconPapers)
JEL-codes: E51 G21 G28 Q51 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:132:y:2024:i:c:s0148619524000493

DOI: 10.1016/j.jeconbus.2024.106207

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