Researchers analyzed the relationship between greenhouse gas (GHG) emissions and loan‑rate spreads relative to the European Central Bank’s deposit facility rate. Results indicate that higher financed GHG emissions consistently increase borrowing costs across collateral sectors. For non‑financial corporates, the emission coefficient is 0.066 (p < 0.05); both haircut and loan volume also show positive, significant effects, while maturity has a small but significant influence. In the financial corporate sector, the emission coefficient is 0.064 (p < 0.01) and loan volume is even more pronounced at 0.091 (p < 0.01), with haircut not significant. For general government collateral, the emission effect is 0.020 (p < 0.05); haircut is negative and significant, and volume and maturity yield positive, significant coefficients. All models control for balance‑sheet ratios and include fixed effects.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp3168~96a956a7fe.en.pdf
Made by AI. If you spot anything of concern write us at contact@cybach.com. We’ll promptly correct irregularities.