FRANKFURT (Reuters) -Euro zone banks are offering loans on more favourable terms to companies with a better climate performance and may be punishing polluters, according to a blog post published by the European Central Bank on Monday.

The ECB has been pushing banks for years to disclose and manage their climate risk, using a range of tools like binding supervisory orders, fines and collateral repricing.

The finding is significant as the European economy relies heavily on bank finance for investment, in contrast with the United States, where capital markets are more widely used to generate funding.

“Banks offer a ‘climate discount’ in their risk assessment to green firms and those in transition,” the blog said, analysing responses in the ECB’s quarterly Bank Lending Survey. “Also, they s

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