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When green meets green

Author

Listed:
  • Hans Degryse

    (KU Leuven)

  • Roman Goncharenko

    (KU Leuven)

  • Carola Theunisz

    (KU Leuven)

  • Tamas Vadasz

    (KU Leuven)

Abstract

What is the impact of environmental consciousness (i.e., being green) as borrower and as lender on loan rates? We investigate this question employing an international sample of syndicated loans over the period 2011-2019. We find that green firms borrow at a signicantly lower spread, especially when the lender consortium can also be classifed as green, i.e., when \green-meets-green". Further tests reveal that the impact of \green-meets-green" became significant and large negative only after the acceptance of the Paris Agreement in December 2015. We argue that this is evidence for lenders responding to policy events which affect environmental attitudes.

Suggested Citation

  • Hans Degryse & Roman Goncharenko & Carola Theunisz & Tamas Vadasz, 2020. "When green meets green," Working Paper Research 392, National Bank of Belgium.
    • Handle: RePEc:nbb:reswpp:202010-392
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    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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