Greening the present to decarbonize the future: an analysis of Italian banks’ decarbonisation strategies

This paper offers an overview of Italian credit institutions’ current strategies supporting their longer-term decarbonisation commitments. It exploits detailed survey-based information on the objectives and strategies of large and smaller banks. According to the data, the Italian banking system is starting to set medium to long-term decarbonisation strategies, especially regarding credit portfolios, by evaluating borrowers’ climate ambitions and supplying green lending products. Larger institutions lead this process, but smaller institutions are also moving forward. Our evidence suggests that even institutions outside the scope of forthcoming regulations are considering setting decarbonisation objectives, indicating that the effort of the Italian banking system goes beyond regulatory requirements. By doing so, institutions will enhance their business resilience, ensuring they can withstand and adapt to the evolving risks and opportunities presented by climate change and the transition to a sustainable economy.

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This paper is part of the Banking Supervision Policy Working Paper Series in the context of the SSM-EUI partnership on SSM Banking Supervision Learning Services. Read more.