SOCIETÀ ITALIANA DI DIRITTO ED ECONOMIA
MICHELE LEMME (Università di Torino)
Abstract
Green loans have emerged as a financial instrument for promoting sustainable development and addressing environmental challenges. But what role does financial development play in the issuance of green loans? We begin by analysing whether any convergence occurred among European countries and the U.K. in the amount issued during 2016-2022, providing evidence of the influences exerted by market maturity, banking structure, and environmental variables in influencing different paths toward club memberships. Next, we investigate the potential impact of financial development on green loans. From these analyses, two main policy implications emerge: the necessity of tailored policy approaches that recognize the distinct characteristics among countries within different clubs, and the importance of pursuing dual goals, promoting private sector involvement and balancing bank lending activities which necessitate a comprehensive and well-coordinated approach from policymakers. Our main recommendations align with the EU's request to increasing private capital inflow into sustainable investments, emphasizing the importance of a more inclusive sustainable finance framework. The latter should facilitate access to sustainable financing, including green loans and mortgages, for households and small businesses.