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Banking sustainability in a large emerging economy: Focus on Brazilian banks

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  • de Moraes, Claudio Oliveira
  • Cunha, Leonardo Vieira
  • Galvis-Ciro, Juan Camilo

Abstract

This study investigates the exposure of Brazilian banks to sectors with a higher sensitivity to climate-related risks. For this purpose, by aligning the novel Sectoral Environmental Risk Index with the International Finance Corporation’s methodology, this research empirically analyzes more than 90 % of Brazilian banks’ credit data. The main objective is to determine whether Brazilian banks expand their portfolios toward environmentally friendly sectors. Based on the findings, there is a positive association between growth credit and portfolios in such sectors, with a persistent effect over time. The results also provide valuable insights for policymakers and stakeholders aiming to foster sustainable finance practices by challenging the access to credit for polluting economic sectors.

Suggested Citation

  • de Moraes, Claudio Oliveira & Cunha, Leonardo Vieira & Galvis-Ciro, Juan Camilo, 2024. "Banking sustainability in a large emerging economy: Focus on Brazilian banks," Journal of Economics and Business, Elsevier, vol. 132(C).
    • Handle: RePEc:eee:jebusi:v:132:y:2024:i:c:s0148619524000493
    DOI: 10.1016/j.jeconbus.2024.106207
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    More about this item

    Keywords

    Climate Change; Banking sustainability; Credit;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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