The Effect of Climate Change Risks on the Banking Sector: A Case Study of the BRICS and G7 Countries

Öz

As the risks of climate change, which began with the industrial revolution, grow by the day, the aim of sustainable development and sustainable finance is coming to the fore. The main motivation of this study is the expectation that climate change risks will negatively affect the activities of firms and they will experience payment difficulties, which will affect the asset quality of the banking system. The aim of this study is to determine the effect of carbon footprint and the total of ecological footprint components on non-performing bank loans in BRICS and G7 countries. In the study, the period 2013-2022 was considered, and panel data analysis was used. As a result of the analysis, it was determined that the carbon footprint (CO2 emission) has a positive effect on the bank's non-performing loan ratio in G7, and it was not found to have a significant effect in BRICS. On the other hand, the total value of the ecological footprint did not have a significant effect on the non-performing loan ratio. Growth, on the other hand, negatively affects the non-performing loan ratio in BRICS and G7 countries. When examining the relationship between the banking system and environmental sustainability, it becomes evident that developing sustainability-oriented credit policies is essential for improving the asset quality of the banking sector. Firms’ renewable energy investments help reduce emissions, while banks should align lending with sustainability goals. The public authorities should support the transition by implementing appropriate policies.

Anahtar Kelimeler

• Carbon Footprint
• Ecological Footprint
• CO2 Emissions
• BRICS
• G7
• Panel Data

İklim Değişikliği Risklerinin Bankacılık Sektörüne Etkileri: BRICS ve G7 Ülkeleri Örneği

Öz

Sanayi devrimiyle başlayan iklim değişikliği riskleri her geçen gün artarken sürdürülebilir kalkınma ve sürdürülebilir finans hedefleri daha da önemli hale gelmektedir. Bu çalışmanın temel motivasyonu iklim değişikliği risklerinin firmaların faaliyetlerini olumsuz etkileyerek ödeme güçlüğüne yol açabileceği ve bunun da bankacılık sisteminin aktif kalitesini zayıflatacağı beklentisidir. Bu doğrultuda, çalışmanın amacı karbon emisyonu ve ekolojik ayak izi bileşenlerinin ve ekonomik büyümenin bankaların takipteki kredileri üzerine etkisini BRICS ve G7 ülkelerinde tespit etmektir. Çalışmada 2013-2022 dönemi ele alınmış ve panel veri analizi kullanılmıştır. Analiz sonucunda karbon ayak izinin (CO2 emisyonu) banka takipteki kredi oranına G7 ülkelerinde pozitif yönlü etkinin bulunduğu, BRICS ülkelerinde ise etkisinin bulunmadığı belirlenmiştir. Öte yandan takipteki kredi oranına ekolojik ayak izi toplam değerinin ise anlamlı bir etkisi bulunmamıştır. Büyüme ise takipteki kredi oranlarını BRICS ve G7 ülkelerinde negatif etkilemektedir. Bankacılık sisteminin çevresel sürdürülebilirlikle ilişkisi ele alındığında sektörün aktif kalitesini iyileştirmek için sürdürülebilirlik odaklı kredi politikaları geliştirmesi önem taşımaktadır. Firmaların yenilenebilir enerji yatırımlarına yönelmeleri sera gazı emisyonlarını azaltırken, bankaların da kredilendirme süreçlerinde bu hedefleri gözetmeleri gerektiği anlaşılmaktadır. Ayrıca, kamu otoriteleri uygun politikalar geliştirerek bu süreci desteklemelidir.

Anahtar Kelimeler

• Karbon Ayak İzi
• Ekolojik Ayak İzi
• CO2 Emisyonu
• BRICS
• G7
• Panel Veri

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