Conference Agenda

We study how mandatory climate-related disclosure affects bank lending using the phased introduction of the EU Taxonomy Regulation. Exploiting the staggered development and implementation of the regulation, we distinguish banks’ responses to anticipated disclosure requirements from their responses to realized firm-level sustainability information. Using syndicated loan data from 2016 to 2025 and a loan-level difference-in-differences design, we show that banks adjust lending to regulated firms with greater Taxonomy-eligible exposure following the 2019 announcement, reallocating credit toward similarly exposed non-regulated firms. Once firms report alignment, higher alignment is associated with larger loan volumes. We further show that banks adjust contractual terms to manage transition risk.

We study how monetary policy shapes firm-level carbon emissions by exploiting the ECB's 2012 entry into the zero lower bound as a plausibly exogenous credit easing. Using administrative and survey data on French manufacturing firms from 2000–2019 and a difference-in-differences design with debt-to-asset ratios as exposure, we show that financially constrained firms cut emissions 9.4\% more than unconstrained ones, primarily through lower energy intensity and capital-deepening productivity gains. Small and medium enterprises drive the results. Aggregating our estimates implies average annual reductions of 3.3\%, amounting to 5.3 million tonnes of $CO_2$ saved

This study investigates how tightened green financial regulation affects corporate environmental performance. In a simple theoretical framework, we reveal that tightened green financial regulation enhances corporate environmental responsibility, and motivates polluting firms to strengthen environmental responsibility as a strategy to ease financing constraints. Using panel data on Chinese listed firms from 2007 to 2020, we find that tightened green financial regulation significantly improves corporate environmental responsibility. Our analysis further shows that firms with greater human and fixed capital, as well as those located in cities with higher administrative rankings, respond more strongly to tightened green financial regulation. This heightened responsiveness is primarily driven by firms’ need to ease financing constraints imposed by green finance regulations, mainly through adjustments in primary financing channels. We also find that political connections weaken the policy’s effectiveness, with executives’ public office experience exerting a stronger influence than local government protection. Moreover, tightened green financial regulation improves environmental performance but reduce economic performance, thereby failing to deliver an environmental-economic win-win outcome. Using the Guideline on Green Credit as a case study, our cost-benefit analysis shows that the policy’s benefits are roughly eleven times its costs. This study offers theoretical insights for China’s high-quality economic development and practical implications for both policymakers and firms undertaking green transitions.

We propose a robust and comprehensive method to identify shocks to transition risk emerging from the shift towards a carbon-neutral economy. We apply it to the US, UK, and Germany and find that various types of events constitute shocks to transition risk. Shocks arise especially from political decisions, going beyond adjustments in specific policy instruments like carbon taxes, underscoring the transition's complexity. In VAR analyses, these shocks have important aggregate effects and induce financial instability. Sectorally, they predominantly impact industries related to fossil fuels and energy. Across countries, relevant differences emerge, emphasizing the importance of country specificities for the transition.