When Green Meets Green

56 Pages Posted: 7 Jan 2021 Last revised: 8 Mar 2023

See all articles by Hans Degryse

Hans Degryse

KU Leuven - Faculty of Business and Economics (FEB)

Roman Goncharenko

KU Leuven - Department of Accountancy, Finance and Insurance (AFI)

Carola Theunisz

Frankfurt School of Finance and Management; KU Leuven

Tamas Vadasz

KU Leuven - Faculty of Business and Economics (FEB)

Multiple version iconThere are 2 versions of this paper

Date Written: January 11, 2023

Abstract

We investigate whether and how the environmental consciousness (greenness for short) of firms and banks is reflected in the pricing of bank credit. Using a large international sample of syndicated loans over the period 2011-2019, we find that green banks indeed reward firms for being green in the form of cheaper loans--however, only after the ratification of the Paris Agreement in 2015. Such loans are also more likely term loans, with fewer covenants and reflect firms' project choices. Thus, we find that environmental attitudes matter "when green meets green."

Keywords: Paris Agreement, Green Firms, Green Banks, Bank Lending

JEL Classification: A13, G21, Q51, Q58

Suggested Citation

Degryse, Hans and Goncharenko, Roman and Theunisz, Carola and Vadasz, Tamas, When Green Meets Green (January 11, 2023). Journal of Corporate Finance, Volume 78, Available at SSRN: https://ssrn.com/abstract=3724237 or http://dx.doi.org/10.2139/ssrn.3724237

Hans Degryse

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Roman Goncharenko (Contact Author)

KU Leuven - Department of Accountancy, Finance and Insurance (AFI) ( email )

Naamsestraat 69
Box 3525
Leuven, 3000
Belgium

HOME PAGE: http://sites.google.com/view/roman-goncharenko

Carola Theunisz

Frankfurt School of Finance and Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

KU Leuven ( email )

Naamsestraat 69
Leuven, Vlaams-Brabant 3000
Belgium

Tamas Vadasz

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

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