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Banking on Coal, Still: Bank Funding of Fossil Fuels around Germany's Coal Exit

Sondershaus, Talina LU (2024)
Abstract
Using a new dataset on fossil fuel funding, this paper examines bank responses to Germany’s 2020 coal phase-out decision. German banks reduced fossil fuel financing relative to other banks but not coal funding. Globally, banks increased underwriting for coal companies relative to other fossil fuel firms. Firms with entirely coal-based post-sample power production received more funding, indicating no shift toward renewables. Syndicated loan data from Dealscan confirm the results and reveal a stronger rise in coal lending by German banks, with risks priced in. The findings highlight financial institutions’ role in the energy transition and persistent capital flows to high-emission sectors.
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author
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
pages
38 pages
publisher
SSRN
language
English
LU publication?
yes
id
786506fc-3c7a-4182-93ae-4d558d203bc8
date added to LUP
2025-09-12 14:00:01
date last changed
2025-09-15 10:18:08
@misc{786506fc-3c7a-4182-93ae-4d558d203bc8,
  abstract     = {{Using a new dataset on fossil fuel funding, this paper examines bank responses to Germany’s 2020 coal phase-out decision. German banks reduced fossil fuel financing relative to other banks but not coal funding. Globally, banks increased underwriting for coal companies relative to other fossil fuel firms. Firms with entirely coal-based post-sample power production received more funding, indicating no shift toward renewables. Syndicated loan data from Dealscan confirm the results and reveal a stronger rise in coal lending by German banks, with risks priced in. The findings highlight financial institutions’ role in the energy transition and persistent capital flows to high-emission sectors.}},
  author       = {{Sondershaus, Talina}},
  language     = {{eng}},
  month        = {{09}},
  note         = {{Preprint}},
  publisher    = {{SSRN}},
  title        = {{Banking on Coal, Still: Bank Funding of Fossil Fuels around Germany's Coal Exit}},
  year         = {{2024}},
}