Information from the cash flow statements and sustainable bank lending: insights from the wood-based sector in Bulgaria

As sustainability becomes a core concern for financial institutions, the integration of environmental, social, and governance (ESG) considerations into lending practices is reshaping credit assessment criteria, especially in resource-intensive industries. This paper explores how information derived from cash flow statements influences sustainable bank lending decisions within the wood-based sector in Bulgaria. By focusing on the intersection of financial transparency and corporate sustainability, the study highlights the importance of cash flow data in evaluating a company’s financial resilience, investment in sustainable practices, and long-term viability. Our study investigates how cash flow indicators such as operating cash flows, capital expenditures, and liquidity metrics interact with ESG disclosures to support or hinder access to green financing. The paper contributes to the growing dialogue on sustainable finance by emphasizing the role of traditional financial statements in complementing ESG information. Implications for regulators and financial institutions are also discussed, with recommendations for integrating cash flow-based and non-financial metrics into sector-specific credit risk frameworks.