EBRD documents how banks' voluntary climate commitments predict both their green lending practices and their borrowers' environmental investments. Using structured surveys of 644 bank CEOs and heads of credit across 33 low- and middle-income countries, EBRD develops indices of banks' green management and lending practices. These unique organizational data reveal that banks signing international climate initiatives (`talk') indeed exhibit stronger green practices (`walk') than non-signatories.
EBRD then merges our bank data with detailed surveys of 4,719 firms and show that firms borrowing from climate-committed banks are more likely to undertake green investments. Exploiting geocoded bank branch and firm locations, EBRD further finds evidence of spatial matching: environmentally-oriented firms preferentially borrow from climate-committed banks in their vicinity. These patterns are consistent with voluntary climate commitments reflecting genuine environmental orientation rather than greenwashing.
This document is prepared by the EBRD in English language. Click here to access the document.
Source: EBRD Working Papers