IDEAS home Printed from https://ideas.repec.org/a/onb/oenbfs/y2020i40b2.html
   My bibliography  Save this article

Green finance – opportunities for the Austrian financial sector

Author

Listed:
  • Andreas Breitenfellner

    (Oesterreichische Nationalbank)

  • Susanne Hasenhüttl

    (Österreichische Gesellschaft für Umwelt und Technik)

  • Georg Lehmann
  • Andreas Tschulik

    (Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology)

Abstract

Climate change and the internationally agreed decarbonization of the global economy not only pose risks to the financial sector and the economy but also open up opportunities. While focusing on the risks, mandate-driven central banks and financial supervisors also need to understand the dynamics and potential of green or sustainable finance markets. The investment needs at the global, European and national level to fund the transition to a climate-neutral economy are mind-blowing. Earmarked public funds alone will not suffice. In addition, financial markets will have to channel (excess) resources above all into sustainable projects. In other words, breaking out of its niche, green finance will have to scale up. Though dynamic, the development of Austria’s green finance markets is still sobering. At the same time, customer surveys suggest that demand for sustainable finance products will grow. The absence of common definitions of sustainability may give rise to “greenwashing,” i.e. making misleading claims about the environ-mental sustainability of a financial product. To prevent this, regulators and supervisors should help overcome market barriers and dysfunction on the supply and demand side. Noteworthy efforts in this respect are the European Commission’s action plan on sustainable finance, the ECB’s paying greater attention to climate change issues as well as the Austrian government’s green finance agenda. Predefining a credible pathway for linking carbon pricing to greenhouse gas emission targets would be the most effective – and least distorting – way to foster green finance and a smooth transition.

Suggested Citation

  • Andreas Breitenfellner & Susanne Hasenhüttl & Georg Lehmann & Andreas Tschulik, 2020. "Green finance – opportunities for the Austrian financial sector," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 40.
    • Handle: RePEc:onb:oenbfs:y:2020:i:40:b:2
    as

    Download full text from publisher

    File URL: https://www.oenb.at/dam/jcr:314567c2-c4c9-4521-8153-bbb55150d159/05_FSR_40_Green_finance.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808, Decembrie.
    2. Gunnar Friede & Timo Busch & Alexander Bassen, 2015. "ESG and financial performance: aggregated evidence from more than 2000 empirical studies," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 5(4), pages 210-233, October.
    3. Thomas Pöchel & Alexandra Schober-Rhomberg & Alexander Trachta & Matthias Wicho, 2019. "Nonbank financial intermediation in Austria – developments since 2008," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 38, pages 74-86.
    4. Elinor Ostrom, 2014. "A Polycentric Approach For Coping With Climate Change," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 97-134, May.
    5. Andreas Breitenfellner & Wolfgang Pointner & Helene Schuberth, 2019. "The Potential Contribution of Central Banks to Green Finance," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 88(2), pages 55-71.
    6. Wolfgang Pointner & Doris Ritzberger-Grünwald, 2019. "Climate change as a risk to financial stability," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 38, pages 30-45.
    7. Guin, Benjamin & Korhonen, Perttu, 2020. "Does energy efficiency predict mortgage performance?," Bank of England working papers 852, Bank of England.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ziyu Duan & Seiyong Kim, 2023. "Progress in Research on Net-Zero-Carbon Cities: A Literature Review and Knowledge Framework," Energies, MDPI, vol. 16(17), pages 1-27, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Viju Raghupathi & Jie Ren & Wullianallur Raghupathi, 2020. "Identifying Corporate Sustainability Issues by Analyzing Shareholder Resolutions: A Machine-Learning Text Analytics Approach," Sustainability, MDPI, vol. 12(11), pages 1-24, June.
    2. Anne Bergmann, 2016. "The Link between Corporate Environmental and Corporate Financial Performance—Viewpoints from Practice and Research," Sustainability, MDPI, vol. 8(12), pages 1-15, November.
    3. Billio, Monica & Costola, Michele & Hristova, Iva & Latino, Carmelo & Pelizzon, Loriana, 2022. "Sustainable finance: A journey toward ESG and climate risk," SAFE Working Paper Series 349, Leibniz Institute for Financial Research SAFE.
    4. Fermín Sánchez-Carracedo & David López & Carme Martín & Eva Vidal & Jose Cabré & Joan Climent, 2020. "The Sustainability Matrix: A Tool for Integrating and Assessing Sustainability in the Bachelor and Master Theses of Engineering Degrees," Sustainability, MDPI, vol. 12(14), pages 1-24, July.
    5. Timo Busch & Peter Bruce-Clark & Jeroen Derwall & Robert Eccles & Tessa Hebb & Andreas Hoepner & Christian Klein & Philipp Krueger & Falko Paetzold & Bert Scholtens & Olaf Weber, 2021. "Impact investments: a call for (re)orientation," SN Business & Economics, Springer, vol. 1(2), pages 1-13, February.
    6. Elżbieta Sobczak & Dariusz Głuszczuk & Andrzej Raszkowski, 2022. "Eco-Innovation and Innovation Level of the Economy as a Basis for the Typology of the EU Countries," IJERPH, MDPI, vol. 19(4), pages 1-17, February.
    7. Karl Aiginger, 2016. "New Dynamics for Europe: Reaping the Benefits of Socio-ecological Transition – Part I: Synthesis. WWWforEurope Deliverable No. 11," WIFO Studies, WIFO, number 58791, Juni.
    8. Jingwen Xia, 2022. "A Systematic Review: How Does Organisational Learning Enable ESG Performance (from 2001 to 2021)?," Sustainability, MDPI, vol. 14(24), pages 1-22, December.
    9. An-Chi Liu & Junyi Wang & Yiting Zhan & Chien-Jung Li & Yang Li, 2021. "Meta-Frontier Analysis of Disclosing Sustainable Development Information: Evidence from China’s AI Industry," Energies, MDPI, vol. 14(19), pages 1-13, September.
    10. Sterner, Thomas & Damon, Maria, 2011. "Green growth in the post-Copenhagen climate," Energy Policy, Elsevier, vol. 39(11), pages 7165-7173.
    11. Arnaud Gougler & Sebastian Utz, 2020. "Factor exposures and diversification: Are sustainably screened portfolios any different?," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 34(3), pages 221-249, September.
    12. Mechthild Donner & Anne Verniquet & Jan Broeze & Katrin Kayser & Hugo de Vries, 2021. "Critical success and risk factors for circular business models valorising agricultural waste and by-products," Post-Print hal-03004851, HAL.
    13. Cornelis Leeuwen & Jos Frijns & Annemarie Wezel & Frans Ven, 2012. "City Blueprints: 24 Indicators to Assess the Sustainability of the Urban Water Cycle," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(8), pages 2177-2197, June.
    14. CHEN, Helen S.Y., 2020. "Designing Sustainable Humanitarian Supply Chains," OSF Preprints m82ar, Center for Open Science.
    15. Jim Butcher, 2006. "The United Nations International Year of Ecotourism: a critical analysis of development implications," Progress in Development Studies, , vol. 6(2), pages 146-156, April.
    16. Denise Ravet, 2011. "Lean production: the link between supply chain and sustainable development in an international environment," Post-Print hal-00691666, HAL.
    17. Preeti Sharma & Priyanka Panday & R. C. Dangwal, 2020. "Determinants of environmental, social and corporate governance (ESG) disclosure: a study of Indian companies," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(4), pages 208-217, December.
    18. Mara Del Baldo, 2012. "Corporate social responsibility and corporate governance in Italian SMEs: the experience of some “spirited businesses”," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(1), pages 1-36, February.
    19. Megan Devonald & Nicola Jones & Sally Youssef, 2022. "‘We Have No Hope for Anything’: Exploring Interconnected Economic, Social and Environmental Risks to Adolescents in Lebanon," Sustainability, MDPI, vol. 14(4), pages 1-17, February.
    20. Rigby, Dan & Woodhouse, Phil & Young, Trevor & Burton, Michael, 2001. "Constructing a farm level indicator of sustainable agricultural practice," Ecological Economics, Elsevier, vol. 39(3), pages 463-478, December.

    More about this item

    Keywords

    climate change; financial market development; sustainable finance;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:onb:oenbfs:y:2020:i:40:b:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stefan W. Schmitz (email available below). General contact details of provider: https://edirc.repec.org/data/oenbbat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.