Existing Barriers to the Development of the Climate Agenda for Banks

Abstract

In the face of declining external demand for climate action and weak domestic competition, the climate agenda in Russia may be perceived by companies and financial institutions as additional difficulties in conducting their activities. Even in the presence of an evolving national regulatory environment, it is difficult for banks to quickly change internal processes in the interests of low-carbon development. Banking organizations face certain obstacles that the Russian financial market and business in general have yet to overcome. Despite the growing trend and attention to the climate agenda, not all banks understand the value of low-carbon investing. Banking organizations consider investment loans for green projects either less profitable or too risky. Low-carbon projects have not yet been widely developed in Russia, which does not allow in practice to assess the economic benefits and risks of investing in them.