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Do sustainable loans deliver? Evidence from the syndicated loan market

Author

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  • de Novellis, Gennaro
  • Perdichizzi, Salvatore
  • Stella, Gian Paolo

Abstract

We study whether sustainable syndicated loans lead to measurable environmental improvements at the firm level. Using a sample of syndicated loans issued between 2018 and 2022, we track borrowers’ CO2 emissions and environmental outcomes over one-, two-, and three-year horizons after loan issuance. We implement dynamic difference-in-differences (DiD) models and complement baseline estimates with propensity-score matched DiD (PSM-DiD). We also collect deal descriptions for sustainability-linked loans (SLLs) to identify whether contracts disclose measurable environmental KPIs (High Transparency) and test whether SLL effects vary with KPI transparency. We find that green loans are associated with large reductions in CO2 emissions over longer horizons. Average effects for SLLs are weaker, but SLLs with high KPI transparency exhibit stronger improvements in environmental ratings over time.

Suggested Citation

  • de Novellis, Gennaro & Perdichizzi, Salvatore & Stella, Gian Paolo, 2026. "Do sustainable loans deliver? Evidence from the syndicated loan market," Finance Research Letters, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:finlet:v:95:y:2026:i:c:s1544612326002321
    DOI: 10.1016/j.frl.2026.109701
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    Keywords

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    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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