Sustainability is already an unavoidable criterion for companies, and conditions not only their production methods, but also their access to financing.
Between 2014 and 2019, the most polluting companies experienced a reduction in loans from Spanish entities, according to a study by the Bank of Spain published this Tuesday.
The large banks, more exposed to climate risk, reduced their credit offer to companies in sectors with more emissions.
The difference, yes, is small: in the period studied, a more exposed bank —which granted more loans to polluting companies— would have offered companies in polluting sectors 2,884.50 euros less per year than to more sustainable companies.
According to the study, companies that operate in the most polluting sectors are larger and have more debt.
In addition, they are more leveraged—their debt-to-asset ratio is higher—and have lower profitability and liquidity.
Using data from 2014 to 2019, the report indicates that the proportion of financing granted to these companies fell by 4%: from 47% of the total in 2014 to 43% in 2019. The choice of this time period, The experts from the Bank of Spain explain, it is because including data after the pandemic would distort the image of the study.
Since the approval of the Paris Agreements in 2015, the regulatory circle on the economy has been narrowing.
In the Old Continent, with the European Green Deal, a succession of standards and guidelines seek to redirect investment towards more sustainable activities.
One of them, highlighted by the Bank of Spain report, is the inclusion by the European Banking Authority of environmental, social and corporate governance (ASG) factors in its guidelines on granting and monitoring loans.
This growing regulatory pressure is even more noticeable in the large or “significant” banks —those that, among other conditions, have total consolidated assets of more than 30,000 million euros— which concentrate 80% of the loans granted.
Compared to other entities, experts from the Bank of Spain point out, these banks "would have actively recomposed their credit portfolios" and would have given greater weight to companies that operate in less polluting sectors "in order to reduce their exposure" .
However, this reduction in credit to the least sustainable companies is moderate in economic terms.
The difference of slightly less than three million euros between what is offered to the most polluting companies and the most sustainable ones is relatively small.
"This magnitude is moderate if one takes into account that the outstanding credit balance of the average company in the sample in a certain bank is 160,000 euros," the study concludes.