Kathrin de Greiff, Torsten Ehlers and Frank Packer test if the risks of climate policy change are priced in the syndicated loan market and find that (i) the premia for environmental risk, as measured by firm-specific CO 2 emissions, are significantly
priced, but only since the Paris accord agreement in 2015; (ii) there is a difference in risk premia due to CO2 emissions within as well as across different industries; (iii) only greenhouse gas emissions directly caused by the firm are priced, and not those
indirectly caused by production inputs, transportation or use of final products; and (iv) “green” banks—either self-identified or those that lend less to carbon-intensive sectors—do not appear to price such risks differently from other
banks. Another interesting contribution to the literature on pricing environmental risks by financial institutions and markets.