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Banks' climate commitments and credit to brown industries: new evidence for France

Jean-Stéphane Mésonnier ()

Working papers from Banque de France

Abstract: In this paper, I investigate whether and how banks align green words with deeds in terms of credit allocation across more or less carbon-intensive industries in France. I use a rich dataset of bank credit exposures across some fifty industries and two size classes of borrowing firms for the main banking groups operating in France, which I merge with information on industries' greenhouse gas emission intensities and a score for banks' self-reported climate-related commitments over 2010-2017. I find evidence that higher levels of self-reported climate commitments by banks are associated with less lending to large corporates in the five brownest industries. However, lending to SMEs across more or less carbon-intensive industries remained unrelated to banks' commitments to green their business. Since SMEs are not required to report on their carbon emissions, while large firms are, these findings suggest that devising an appropriate carbon reporting framework for small firms is likely to enhance the decarbonization of bank lending.

Keywords: : Green banks; Greenhouse Gas Emissions; Climate Change. (search for similar items in EconPapers)
JEL-codes: G21 Q54 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2019
New Economics Papers: this item is included in nep-ene, nep-ent, nep-env and nep-hme
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:743

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