Indexing capital requirements on climate : What impacts can be expected ?

Monday 18th October from 9am to 10am

Increasing the contribution of banks is the major issue that I4CE proposed to address in a study published in September 2021.

The objective is to overcome the classic opposition between the supporters of a Green Supporting Factor (for prudential relief due to the lower risk of green assets) and of a Penalizing Factor (to penalize activities that emit high CO2 levels because they are more exposed to transition risks).

By determining the impacts of these two approaches on project financing, on the internal profitability of banks, and on credit growth or contraction, I4CE has demonstrated that prudential tools are perhaps a response to a risk problem, but they do not sufficiently respond to the challenges of the transition. Apart from the scheduled exit from fossil fuel activities for which a strong and localized penalizing factor may be possible, the other impacts on the transition of these devices are negligible or even counterproductive.

Moderation by :

• Pauline Becquey, Managing Director of Finance for Tomorrow, will moderate this exchange;
• Julie Evain, Reserach fellows, I4CE, will present the highlights of the study;
• Pierre Monnin, Senior Fellow, Council on Economic Policies, will then react.

A question / answer period was planned for the second part of the webinar.This webinar was held in English.