Bank loans to renewable energy projects as share of CET1 capital in Europe 2017

For a financial service to be considered sustainable finance, it needs to integrate environmental, social and/or goverance (ESG) criteria, aiming for lasting benefits not only for the client of the service, but also for society overall. One of the ways banks can contribute to the decarbonisation of the energy sector is through providing loans to renewable energy projects. Common Equity Tier 1, or CET1 capital, is a measure introduced to ensure the capital adequacy of banks and includes equities such as cash and stock.

As of the end of 2017, UniCredit S.p.A was one of the leaders in sustainable finance in Europe, with outstanding loans to renewable energy projects amounting to 16.8 percent of the CET1 capital of the bank. Smaller and more specialised banks might give even higher priority to this particular asset class. In Germany, at least five banks had renewable energy loans to CET1 capital ratio exceeding 100 percent.

More in-depth information can be found in theStatista dossier on socially responsible investments (SRI) in Europe.