The Banking Industry's Role in Climate Change Mitigation and the Transition to a Low-Carbon Global Economy

Bowman, Megan

doi:10.2139/ssrn.1725692

Cited by 10 publications

(11 citation statements)

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“…The risks can come from the fact that financial institutions have assets and liabilities vulnerable to climate change, such as real estate and infrastructure in areas prone to natural disasters (Kedward et al 2022). Also, banks and insurance companies that back assets vulnerable to physical climate risks, like crops that do not grow, are vulnerable to direct physical risks (Bowman 2010).…”

Section: Climate Risks and Financial Stabilitymentioning

confidence: 99%

RETRACTED ARTICLE: Financial stability influence on climate risk, GHG emission, and green economic recovery of China

Liu

2023

Environ Sci Pollut Res

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This study examines the nexus between financial stability, climate risks, GHG emission mitigation, and green economic recovery of China. Financing efforts to protect against and reduce the hazards associated with climate change need to consider these risks and resources. Study used the Kalman technique of analysis for empirical inference. This research focuses on the carbon risk in China by employing a Kalman estimation approach. Although environmental mitigation was found to be important at 39%, financial strength and carbon hazards were considerable at 34%. Moreover, the report demonstrates the relationship between climatic threats and environmental drift in China, at a rate of 17%, emphasizing the need to address climate change issues. A state’s fiscal health guarantees national economic security while pursuing green economic recovery initiatives. Researchers concluded that precise policy suggestions were needed to promote green economic development.

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Section: Climate Risks and Financial Stabilitymentioning

confidence: 99%

RETRACTED ARTICLE: Financial stability influence on climate risk, GHG emission, and green economic recovery of China

Liu

2023

Environ Sci Pollut Res

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“…Banks, risk assessors, lenders, and financiers can influence the business practices and the GHG emissions behaviors of other corporate actors [2]. They play a crucial role in the emerging global market for GHG emission reductions by providing specific financial services such as project finance and equity evaluation of GHG-emitting companies, which urge to be re-optimized [21].…”

Section: Regulations Banks and Climate Changementioning

confidence: 99%

“…They play a crucial role in the emerging global market for GHG emission reductions by providing specific financial services such as project finance and equity evaluation of GHG-emitting companies, which urge to be re-optimized [21]. In doing so, banks can influence corporate actors (clients and suppliers) to reduce GHG emissions by applying climate-related decision-making processes and product/market innovations [2].…”

Section: Regulations Banks and Climate Changementioning

confidence: 99%

“…It has consequences to the planet, society, and economy [1]. Ultimately, there is a broad agreement that climate change is the greatest economic and moral challenge [2]. The demanding challenge should be unquestionable.…”

Section: Introductionmentioning

confidence: 99%

“…The demanding challenge should be unquestionable. All sectors of society need to find, together, strategies to avert a cataclysm [2].…”

Section: Introductionmentioning

confidence: 99%

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Banks and Climate-Related Information: The Case of Portugal

Santos

Rodrigues

2021

Sustainability

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In 2014, a European Union (EU) Directive required certain large undertakings and groups to disclose non-financial information from 2017 onwards. In 2017, the EU guidelines on non-financial reporting established that reporting climate-related information is part of the non-financial information. Later, in 2019, the guidelines were reinforced to include a supplement that envisages improving climate-related information reporting. Banks can contribute to reducing climate-related risks by supporting investments in economic activities that aim to mitigate the risk of climate change. Capital needs should be reoriented towards sustainable investment. Banks shall manage financial risks arising from climate change; therefore, they must integrate climate change into their policies and procedures, assessing the potential impact of projects and financing on climate change. This study aimed to evaluate how banks in Portugal have been reporting climate-related information and whether the level of information has increased since 2017. Using content analysis, findings indicated that banks are already including climate-related information; however, they are still far from approaching what the new guidelines require. Results suggested that there is still a long way to go in this area concerning banks and regulators.

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Do environmental and climate scores for financial institutions reflect lending and underwriting activity? A case study of global banks

Cregan,

Kelly,

Clinch

2024

Bus Strat Env

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Achieving international climate targets may require more than $8 trillion in annual investments to 2030. We investigate the extent to which third‐party environmental scores for banks reflect lending and underwriting in fossil‐fuel and low‐carbon industries, and how ratings are influenced by outward signals of commitment to climate action. We provide empirical evidence on the performance of leading Environmental, Social and Governance (ESG) ratings providers and offer actionable guidance as to how ESG ratings may be improved in this context. We find that banks' environmental scores are most strongly influenced by signals of future intention regarding climate action, rather than by prior and current lending and underwriting behaviour. Our analysis highlights the need for rating providers, when constructing environmental scores for banks, to place more weight on key capital allocation decisions, and less on future intentions. We recommend that banks disclose breakdowns of their financing activities in key carbon‐intensive and low‐carbon industries.

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The Banking Industry's Role in Climate Change Mitigation and the Transition to a Low-Carbon Global Economy

Cited by 10 publications

References 0 publications

RETRACTED ARTICLE: Financial stability influence on climate risk, GHG emission, and green economic recovery of China

RETRACTED ARTICLE: Financial stability influence on climate risk, GHG emission, and green economic recovery of China

Banks and Climate-Related Information: The Case of Portugal

Do environmental and climate scores for financial institutions reflect lending and underwriting activity? A case study of global banks

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