Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271050 
Year of Publication: 
2023
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 7/2023
Publisher: 
Bank of Finland, Helsinki
Abstract: 
Using lenders becoming members of the Task Force on Climate-Related Financial Disclosures (TCFD) as a plausible exogeneous shock, we examine whether and how lenders' commitment to transparent climate-related disclosures affects borrower firms' environmental performance. We find that client firms of TCFD-member lenders, relative to control firms, significantly improve their environmental performance after the TCFD launch. The effects are stronger for polluting firms. Moreover, TCFD-member lenders influence their borrowers' environmental performance via charging higher loan spread and reducing the number and amount of new loans issued to polluting firms. Finally, polluting clients of TCFD-member lenders experience tightened financial constraints subsequently.
Subjects: 
Climate-related Disclosure Commitment
Credit Rationing
Borrower Environmental Performance
JEL: 
G21
G30
Q54
ISBN: 
978-952-323-436-9
Document Type: 
Working Paper

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