Green financial intermediation – from demand to impact

Green financial intermediation – from demand to impact

Achieving the Paris agreement goals to limit global warming to well below 2 degrees Celsius compared to pre-industrial levels and contributing to the UN Sustainability Goals will require massive public and private investments. In this context, the financial sector plays a crucial role in facilitating the transition to a carbon neutral economy by intermediating between the demand and supply of appropriate financial instruments. However, since green preferences introduce a non-financial dimension into the investment process, the financial sector that traditionally focuses on risk and return may lack the tools for an efficient intermediation. In consequence, finance may act as a brake rather than an accelerator in the transition to carbon neutrality. Indeed, aggregate data suggests that households’ “green” preferences do not translate into the purchase of green investment products, whereas institutional investors’ demand for green bonds seems to strongly exceed its supply.   Against this background, this project provides an analysis of all stages of green financial intermediation. We cover the process of green financial intermediation from investors’ demand and new regulations, via mechanisms that translate these into differential funding conditions for greener and browner investment projects of companies, to the climate impact of these investment projects. This ensures that we can identify main fault lines and frictions of green financial intermediation and develop pertinent policy recommendations directed at improving the role of finance as a lever for decarbonization.

Project members

Karolin Kirschenmann

Karolin Kirschenmann

Coordinator
Stellvertretende Leitung

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Tabea Bucher-Koenen

Tabea Bucher-Koenen

Coordinator
Leitung

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Frank Brückbauer

Frank Brückbauer

Advanced Researcher

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Thibault Cézanne

Thibault Cézanne

Researcher

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Michael Schröder

Michael Schröder

Senior Researcher

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Vitali Gretschko

Vitali Gretschko

Leitung

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Martin Kesternich

Martin Kesternich

Stellvertretende Leitung

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Nicolas Fugger

Nicolas Fugger

Advanced Researcher

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Philip Zilke

Philip Zilke

Researcher

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Contact

Deputy, Dr. Karolin Kirschenmann
Telefon +49 0621 1235-351
Head, Prof. Dr. Tabea Bucher-Koenen
Telefon +49 (0)621 1235-147