GREEN CREDIT – THE ROLE OF BANKS IN FACILITATING CARBON NEUTRALITY

The paper analyzes several elements of credit institutions’ decisions on crediting companies. Primarily, the paper analyzes the fundamentals of green financing and its impact on credited companies and credit institutions’ profits. Furthermore, the paper deals with the information credit institutions take into account when calculating a company’s credit score and carbon footprint and the notion that a company’s credit score is not independent of its carbon footprint. Methodologically, the paper relies on statistical and econometric data and theoretical analyses of that data. Afterward, the paper deals with the question of whether or not a credit institution should credit a company or if it should use other tools at its disposal to steer companies in the desired (green) direction. The last part questions the legality of differentiating interest rates on the same market based on companies’ carbon footprints.