Staff Memo
Firms' transition to lower greenhouse gas emissions and the risk in Norwegian banks
- Author:
- Ida Nervik Hjelseth, Rønnaug Melle Johansen and Haakon Solheim
- Series:
- Staff Memo
- Number:
- 3/2024
Abstract
For a period of time, climate change could increase firms’ costs and reduce the value of their assets. If we assume that the composition of banks’ lending remains constant, the increase in costs could increase the banks’ losses. The risk of increased losses is very unevenly distributed between industries, and the increase will probably come at the same time as firms’ need for financing to reduce emissions increases.
Staff Memos present reports and documentation written by staff members and affiliates of Norges Bank, the central bank of Norway. Views and conclusions expressed in Staff Memos should not be taken to represent the views of Norges Bank.
ISSN 1504-2596 (online)