The Role of Sustainable Loan Products in Managing Sustainability Risks in German Regional Banks

Dominic Strube

2025

Abstract

This study examines the role of sustainable loan products, such as Green Loans and Sustainability-Linked Loans, in managing sustainability risks for regional banks in Germany. Based on a survey of 88 Less Significant Institutions and 18 Significant Institutions, the findings show that regional banks predominantly rely on subsidized loans due to their simplicity and low administrative costs. However, these loans lack flexibility to address specific sustainability risks. In contrast, Green Loans and Sustainability-Linked Loans offer greater adaptability but require significant resources for implementation, monitoring, and verification. Challenges such as limited demand, technical constraints, and insufficient sustainability data, particularly from small businesses, further limit their adoption by regional banks. To overcome these barriers, support from IT service providers, banking associations, and targeted market education is essential. Despite the challenges, sustainable loan products present an opportunity for regional banks to enhance resilience, strengthen local economies, and contribute to a sustainable financial system.

Paper Citation

in Harvard Style

Strube D. (2025). The Role of Sustainable Loan Products in Managing Sustainability Risks in German Regional Banks. In Proceedings of the 7th International Conference on Finance, Economics, Management and IT Business - Volume 1: FEMIB; ISBN 978-989-758-748-1, SciTePress, pages 197-202. DOI: 10.5220/0013358200003956

in Bibtex Style

@conference{femib25,
author={Dominic Strube},
title={The Role of Sustainable Loan Products in Managing Sustainability Risks in German Regional Banks},
booktitle={Proceedings of the 7th International Conference on Finance, Economics, Management and IT Business - Volume 1: FEMIB},
year={2025},
pages={197-202},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0013358200003956},
isbn={978-989-758-748-1},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 7th International Conference on Finance, Economics, Management and IT Business - Volume 1: FEMIB
TI - The Role of Sustainable Loan Products in Managing Sustainability Risks in German Regional Banks
SN - 978-989-758-748-1
AU - Strube D.
PY - 2025
SP - 197
EP - 202
DO - 10.5220/0013358200003956
PB - SciTePress