In the past two decades, a number of banks joined global initiatives aimed at mitigating climate change by “greening” their asset portfolios. We study whether banks that made such commitments have altered the emission exposure of their portfolios of syndicated loans. We rely on loan-level information with global coverage combined with country-industry information on emissions. We find that all banks have reduced the emission exposures of their syndicated loan portfolios over the last decade. However, we do not find differences between banks that did and those that did not signal their sustainability goals. We do find that banks that signed Principles of Responsible Investment (PRI) shortened the maturity of the loans extended to borrowers in higher-emitting industries, but only temporarily. Thus, we conclude that banks reduced their lending to highly-emitting sectors on average but voluntary climate commitments did not contribute to syndicated loan reallocation away from those sectors.
Suggested citation:
Hale, Galina, Brigid Meisenbacher, Rami Najjar and Fernanda Nechio. 2025. “Industrial Composition of Syndicated Loans and Banks’ Climate Commitments.” Federal Reserve Bank of San Francisco Working Paper 2024-23. https://doi.org/10.24148/wp2024-23