Title: Bank Risk and Climate System

Lunch will be available from 12pm

Abstract:

We investigate bank risk in relation to climate change with publicly listed European banks. We analyse how sensitive these banks are to the climate intensity of their loan portfolio. Using the Köppen-Geiger classification and controlling for economic, market and bank-specific factors, we find that banks’ climate vulnerability significantly increases in relation to the climate system. Furthermore, banks with higher climate vulnerability have higher default risk. However, there does not appear to be a significant direct relationship between the climate system and the measures of bank risk used. Therefore, we conclude that the latter is not priced in bank business.

Bio:

Bert Scholtens is the Professor of Sustainable Banking and Finance at the University of Groningen, The Netherlands. He also holds a position as Finance Professor at the University of St Andrews, Scotland, UK. Fields he operates in are Banking, Finance, Economics. He applies this to Socially Responsible Investing, Financial intermediation, Financial institutions, International finance, Financial systems, Environmental economics, Biodiversity finance, Climate Finance, Energy Transition Finance.