Green bond issuance by banking sector in CEE Region
Lancikova, Veronika (2024)
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-202404247672
https://urn.fi/URN:NBN:fi:amk-202404247672
Tiivistelmä
Moving away from fossil fuels and transformation towards net-zero economy is among the top priorities worldwide. There is already a plethora of undeniable scientific facts underlying the financial consequences of climate change. The main goal of the presented study was to highlight the importance of speeding up the green transition in the region of Central and Eastern Europe (CEE). The sizeable investments into energy sector, transportation, construction, or manufacturing are necessary in the CEE region to catch up with the counterparts in western Europe. Banking sector has a power to shape the money flow in the economy. Therefore, it is especially important to investigate the position of banking sector in financing green transition in the CEE region.
Green bonds are an important financial tool which can channel private capital towards green transition, climate adaptation, and mitigation efforts. Herein, the focus was put on the green bond issuances made by banking sector in the selected central and eastern European countries. The research imperative was to investigate the actual environmental impact of green bonds, and the effect of green bond issuances on the strengthening environmental commitments in banking sector. Nevertheless, the green bond market is established in the investigated CEE countries, the green bond issuances made by banking sector are still relatively new in this region. Thus, the evaluation of real environmental benefit arising from green bond financing is challenging. It was observed that mainly three green projects categories are being financed through green bonds as follows: green buildings, renewable energy, and clean transportation. Even though these sectors are relevant for green transition, there is only minor pro-gress in decarbonization of hard to abate sectors.
Significant shift forward in communication of environmental targets was observed in banking sector over the past recent years. This is more likely to be a result of multiple drivers not just green bond issuance itself. The orchestrated interplay of strengthening regulations, investor’s demand for improved transparency of green products and services, or competitive advantage are challenging companies to set ambitious climate goals.
Green bonds are an important financial tool which can channel private capital towards green transition, climate adaptation, and mitigation efforts. Herein, the focus was put on the green bond issuances made by banking sector in the selected central and eastern European countries. The research imperative was to investigate the actual environmental impact of green bonds, and the effect of green bond issuances on the strengthening environmental commitments in banking sector. Nevertheless, the green bond market is established in the investigated CEE countries, the green bond issuances made by banking sector are still relatively new in this region. Thus, the evaluation of real environmental benefit arising from green bond financing is challenging. It was observed that mainly three green projects categories are being financed through green bonds as follows: green buildings, renewable energy, and clean transportation. Even though these sectors are relevant for green transition, there is only minor pro-gress in decarbonization of hard to abate sectors.
Significant shift forward in communication of environmental targets was observed in banking sector over the past recent years. This is more likely to be a result of multiple drivers not just green bond issuance itself. The orchestrated interplay of strengthening regulations, investor’s demand for improved transparency of green products and services, or competitive advantage are challenging companies to set ambitious climate goals.