Economic efficiency of “green” lending for commercial banks

This article analyzes the economic efficiency of green lending for Russian commercial banks in the context of climate change and the transition to sustainable development. The aim of the study is to evaluate the economic efficiency of green lending for commercial banks in Russia. The research, based on the analysis of loan portfolio data and financial statements of several banks, demonstrates that financing environmentally responsible projects has a positive impact on key performance indicators of credit institutions. Specifically, it leads to an improvement in loan portfolio quality, an increase in the customer base, a reduction in credit risk and non-performing loans, and a decrease in the volume of provisioning. At the same time, the implementation of green lending practices does not significantly affect the capital adequacy ratio. Despite existing barriers, especially those related to imperfections in legislation and the underdeveloped market for “green” projects, green lending demonstrates significant potential for growth and expansion of credit product offerings, creating a new promising and sustainable market for Russian banks. Recommendations for banks on implementing green lending, taking into account the specifics of the Russian market and regulatory environment, are formulated.