In an interview with Handelsblatt, Orith Azoulay – Head of Green and Sustainable Finance at Natixis CIB – discusses the bank’s incorporation of climate risk into its decision-making process. Banks are an important factor when it comes to making the economy greener, but they should be careful not to overshoot their mark in green exuberance and get the bad loans of tomorrow on their balance sheet.
As one of the pioneers in terms of sustainability in the financial sector, Natixis introduced its Green Weighting Factor, meaning that the bank puts more capital aside for loans to polluters and less for green projects. Although sustainability and profitability go hand in hand in certain industries, banks should be careful not to underestimate credit risks and add bulk risks on their balance sheet.
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