No. 706 - Bank exposure to climate-related physical risk in Italy:an assessment based on AnaCredit data on loans to non-financial corporates

Vai alla versione italiana Site Search

by Giorgio Meucci and Francesca RinaldiJuly 2022

The study provides an assessment of Italian banks' exposure to physical risk from climate change in relation to lending to non-financial corporates. A first analysis considers all types of climate risks at province level, while a second in-depth study focuses on flood and landslide risk at municipality level. The methodology takes into account both the location of the debtor firms' operating facilities and the mitigating role of collateral.

About a quarter of the value of loans to firms is granted to businesses located in highly risky provinces; 58 per cent of the value of these loans is secured, even if part of the collateral could also be impacted. The coverage rate falls to 38 per cent if only personal guarantees are considered. Based on the analysis at municipality level, the share of loans exposed to flood and landslide risk amounts to 3 and 8 per cent respectively.

Full text