Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297322 
Year of Publication: 
2023
Series/Report no.: 
ECB Working Paper No. 2882
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
Using confidential information on banks' portfolios, inaccessible to market participants, we show that banks that emphasize the environment in their disclosures extend a higher volume of credit to brown borrowers, without charging higher interest rates or shortening debt maturity. These results cannot be attributed to the financing of borrowers' transition towards greener technologies and are robust to controlling for banks' climate risk discussions. Examining the mechanisms behind the strategic disclosure choices, we highlight that banks are hesitant to sever ties with existing brown borrowers, especially if they exhibit financial underperformance.
Subjects: 
financial institutions
sustainability reporting
strategic disclosure
credit exposure
zombie lending
JEL: 
G11
G15
G21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6259-9
Document Type: 
Working Paper

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