The Green Asset Ratio (GAR) – A New KPI for Credit Institutions

Center for Financial Studies Working Paper No. 683, 2023

22 Pages Posted: 10 Jan 2023

See all articles by Volker Brühl

Volker Brühl

Center for Financial Studies (CFS)

Date Written: January 5, 2023


The financial sector plays an important role in financing the green transformation. Various regulatory initiatives in the EU aim to improve transparency in relation to the sustainability of financial products and the sustainability of economic activities of non-financial and financial undertakings. For credit institutions, the Green Asset Ratio (GAR) has been established by the European regulatory authorities as a KPI for measuring the proportion of Taxonomy-aligned on-balance-sheet exposure in relation to the total assets. The breakdown of the total GAR by type of counterparty, environmental objective and type of asset provides in-depth information about the sustainability profile of a credit institution. This information, which has not been available to date, may also initiate discussions between management and shareholders or other stakeholders regarding the future sustainability strategy of credit institutions. This paper provides an overview of the regulatory background and the method of calculating the GAR along different dimensions. Finally, the potential benefits and limitations of the GAR are discussed.

JEL Classification: G10, G20

Suggested Citation

Brühl, Volker, The Green Asset Ratio (GAR) – A New KPI for Credit Institutions (January 5, 2023). Center for Financial Studies Working Paper No. 683, 2023, Available at SSRN: or

Volker Brühl (Contact Author)

Center for Financial Studies (CFS) ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323

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