Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283108 
Year of Publication: 
2023
Series/Report no.: 
JRC Working Papers in Economics and Finance No. 2023/12
Publisher: 
European Commission, Ispra
Abstract: 
When firm-level information is not available, the greenness of financial portfolios, in terms of alignment to the EU Taxonomy, and their exposure to climate-related transition risk need to be estimated with a top-down approach. We improve the accuracy of available estimates by providing country-specific coefficients for both dimensions, based on homogeneous definitions of greenness and transition risk across countries. An application on confidential data from the European Central Bank shows that the exposure to transition risk of less regulated financial institutions has more than tripled from 2014 to 2023. Moreover, we show that the levels of Taxonomy alignment and transition risk exposure are largely heterogeneous across countries and sectors.
Subjects: 
greenness
climate-related transition risk
climate-related financial disclosures
EU Taxonomy
green financial flows
JEL: 
G2
G3
Q54
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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