The Impact of Carbon Reduction Support Tools on the Market Value of Commercial Banks under the “Dual Carbon” Goals
GONG Bing, ZHANG Bei, YANG Siyao, XU Zhaoyi
School of International Political Economy, University of Chinese Academy of Social Sciences; Research Bureau of the People's Bank of China; PBC School of Finance, Tsinghua University; School of Economics and Management, Tsinghua University
Summary:
In November 2021, the People's Bank of China introduced the Carbon Reduction Support Tool (CRST) policy, providing refinancing support for the principal of carbon reduction loans issued by commercial banks that meet the criteria. As a kind of innovation in structural policy tools, the CRST links central bank funds with financial institutions' lending to carbon reduction projects, creating a unique advantage in precisely targeting the green real economy. While leveraging the basic role of market resource allocation, it has achieved the policy goal of directing funds towards green and low-carbon development projects. However, it is an important proposition to verify whether commercial banks, as the main carriers of this structural monetary policy, can obtain sufficient incentives and compensation through participation in the CRST to offset the higher credit risks of green loans and mitigate the impact on operational performance due to green lending. This paper, based on manually collected data on whether 42 listed commercial banks have issued carbon reduction loan disclosure announcements, comprehensively organizes data on the amount of carbon reduction loans issued, the number of loan projects, the fields of loans, and the carbon reduction achieved. Innovatively, this paper matches commercial bank carbon reduction loan data with market value and operational management data of listed commercial banks for empirical analysis. The study finds that commercial banks' participation in the CRST and the expansion of carbon reduction loan portfolios can effectively enhance bank market values. Key mechanisms include signal transmission effects, market reputation effects, and risk governance effects. Carbon reduction loans in clean energy and environmental protection sectors significantly have boosted market value, whereas the impact of carbon reduction technology loans is not yet clear. Additionally, the higher the proportion of carbon reduction loans in green lending, the more significant the enhancement in bank market value. The potential innovations of this paper are mainly reflected in the following aspects: Firstly, by comprehensively collecting and organizing data on carbon reduction loans issued by banks, this paper systematically explores the impact of commercial banks' participation in the CRST on their market value, providing a data foundation and empirical evidence for analyzing and revealing the policy participation, loan scale, and loan fields of commercial banks. This is of both theoretical and practical significance for assessing the effectiveness of structural monetary policy innovations in green systems. Secondly, the findings suggest that enhancing stock liquidity, optimizing market reputation, increasing central bank borrowing, improving capital adequacy ratios, and reducing stock price crash risks are significant channels to enhance bank market values. These findings not only offer specific strategic recommendations for banks to enhance market values through green financial activities but also provide crucial market insights for banks and financial institutions to exert the value-enhancing effects of green finance in formulating future business strategies and investment decisions. Thirdly, through the heterogeneity analysis in the field of carbon reduction and the comparative analysis of green loans, this paper reveals significant differences in the impact of different types of green financial activities on the market value of commercial banks, providing practical evidence for regulatory bodies and policymakers to further refine and optimize structured monetary policies. The research conclusions of this paper have the following policy implications: Firstly, although commercial banks' issuance of carbon reduction loans can significantly enhance their market value, issuing ordinary green loans does not have the same effect. This indicates that due to the higher risks, longer cycles, greater uncertainties, and the shortage of specialized personnel affecting green finance at this stage, the development and promotion of green finance at this stage still face significant challenges. Therefore, to further promote the development of green finance, regulatory bodies should adopt diversified strategies, extending the support policies and successful experiences of carbon reduction loans to more areas of green finance. Secondly, in today's highly developed information technology society, to promote the development of green finance, banks should focus on the disclosure of information on green finance practices, regularly publish green finance reports with detailed progress, results, and challenges of their green credit projects, and actively communicate with the public, clients, and investors through various channels, including social media, official websites, and industry conferences, to increase transparency. This not only helps establish a positive image of banks in the field of green finance but also promotes the overall development and maturity of the green finance market. Thirdly, to achieve long-term environmental protection goals, particularly in reducing carbon emissions and addressing climate change, regulatory bodies and banks must work together to enhance research and support for carbon reduction technology loans. Banks and regulatory bodies should consider setting up special green finance funds or credit products to provide financial support for the research and commercialization of carbon reduction technologies. Additionally, by enacting preferential policies and fiscal and tax incentives, the costs and risks for enterprises adopting carbon reduction technologies can be reduced, ultimately promoting the early realization of the national “Dual Carbon” strategy and sustainable development goals through financial supply-side reforms.
巩冰, 张蓓, 杨斯尧, 徐照宜. “双碳”目标下碳减排支持工具对商业银行市场价值的影响研究[J]. 金融研究, 2024, 529(7): 77-95.
GONG Bing, ZHANG Bei, YANG Siyao, XU Zhaoyi. The Impact of Carbon Reduction Support Tools on the Market Value of Commercial Banks under the “Dual Carbon” Goals. Journal of Financial Research, 2024, 529(7): 77-95.
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