Blog
Blog
Blog
Blog
7 Apr, 2021 Author Jon Rees
European banks may gain an edge over their U.S. peers with a proposed green asset ratio designed to give investors clarity on increasingly important environmental issues, according to market participants.
The European Banking Authority has recommended that banks adopt a greet asset ratio, or GAR, to show how their economic activities are environmentally sustainable, putting the proposal out to consultation.
The ratio would measure the sum of a bank s climate-friendly loans, advances and debt securities compared with total assets. It would be compiled in accordance with the European Union s taxonomy rules, launched last year, which categorize economic activities and their effect on climate change. Disclosures under the new measure are expected to start gradually from 2022.