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Climate change and euro area firms’ green investment and financing ‒ results from the SAFE

Author

Listed:
  • Ferrando, Annalisa
  • Groß, Johannes
  • Rariga, Judit

Abstract

In a pilot round of the Survey on the Access to Finance of Enterprises (SAFE), conducted between 25 May and 26 June 2023, euro area firms were asked about climate change. Firms attach substantial importance to the potential negative impact from the physical risks of climate change. However, they are even more concerned about transition risks. Compared with physical risks, stricter climate standards provide a stronger incentive for firms to invest in climate change mitigation. Nonetheless, high financing costs and insufficient public subsidies are important obstacles to green investment. The results of the survey highlight the important role played by public loan guarantees and private sector funds in directing resources towards the greening of the economy. JEL Classification: D22, Q54, E52

Suggested Citation

  • Ferrando, Annalisa & Groß, Johannes & Rariga, Judit, 2023. "Climate change and euro area firms’ green investment and financing ‒ results from the SAFE," Economic Bulletin Boxes, European Central Bank, vol. 6.
    • Handle: RePEc:ecb:ecbbox:2023:0006:5
    Note: 235236
    as

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    More about this item

    Keywords

    climate change; investment; survey data;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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