EN 
RO The National Bank of Romania has published the Climate Risks for the Banking Sector in Romania - 2024, a report on the influence of climate change on the economy and the financial system. The document emphasises both the increasing share of green finance and the amplification of climate risks affecting economic sectors in Romania. The analysis provides a clear picture of the evolution of sustainable lending and the exposure of the Romanian economy to extreme weather events.
From the perspective of financing institutions, climate risk is the risk associated with exposures that are vulnerable to climate change. The two components of climate risk are physical risk and transition risk. The NBR lists among the physical risks facing Romania floods, droughts and extreme temperatures, with a significant impact on the business environment and bank lending.
Floods: 23 counties vulnerable in 2024
On floods, the NBR identifies 23 vulnerable counties to this phenomenon in 2024. Companies located in these areas contribute 12.7% to gross value added (GVA) and hold 13.2% of total assets. By comparison, in 2022, flood-affected companies generated 151TPTP3T of GVA and owned 13.7% of assets.
Gross Value Added (GVA) is the economic indicator that measures the contribution of an industry, firm or region to the national economy. It is calculated as the difference between the value of output and the cost of goods and services used to realise it. Basically, GVA reflects how much an economic activity contributes to a country's GDP growth.
Drought and extreme temperatures affect over 30 counties
Drought affects 31 counties, with an economic impact of 2.3% of GVA. Banking exposure increased to 71TPTP3T in 2024 from 5.5% in 2023 and 7% in 2022.
30 counties were exposed in 2024 to the risk of extreme temperaturesand affected companies generate 10.4% of GVA. Banking exposure to this phenomenon increased from 71TPTP3T in 2023 to 91TPTP3T in 2024.
Other physical risks identified were related to the increase in average annual temperature by 2.6°C above the historical average, as well as to deforestation totalling 25.1 kilohectares.
Faced with these challenges, green finance is becoming an important component of the banking system. The NBR report shows an increase in green lending, although it still accounts for a modest percentage of total lending. The share of green loans in total corporate loans has increased from 1.6% in 2023 to 2.9% in 2024. In the annual flow of lending, green finance accounts for 4.3%, indicating an accelerated transition towards sustainable investment. The total amount of green loans reached RON 5.7bn for companies and RON 10bn for the population.
Green finance is mainly directed towards energy-efficient buildings (54% of the total), sustainable transport, waste reduction and modernisation of industrial infrastructure. Another indicator of increased interest in sustainable finance is the issuance of green bonds. In 2024, 7 issues were launched totalling €8.1bn, compared to only €247m in 2022.
It should be noted that the NBR uses in its analyses the definition of green finance, which refers to climate lending by identifying activities that have the effect of mitigating environmental impacts or adapting to climate change.
Activities considered as climate funding
- Environmental impact mitigation activities
Renewable energy:
- Clean energy production (solar, wind, geothermal, biomass, etc.)
- Improving transport and distribution mechanisms
- Investment to develop storage systems
Energy efficiency:
- Upgrading facilities in industries or changing to new ones
- Investment in residential/commercial/public/vehicle premises (Improving or replacing the car fleet)
- Lighting, heating systems, insulation (part of energy efficiency)
Reducing waste and waste water
Transport:
- Changing urban transport (including measures to support non-motorised transport)
- Management measures to reduce greenhouse gas emissions (car parks, car-free zones, etc.)
- Intra-urban rail transport offering alternatives to road/air transport
- Efficient and low-emission transport infrastructure
Green buildings - funding for meeting/achieving green building standards such as:
- IFC Certificate of Excellence in Design for High Efficiency Design Excellence (EDGE)
- Local green building certification scheme
- Leadership in Energy and Environmental Design (LEED) certificate issued by US Green Building
- BRE certificate for the Building Research Environmental Assessment Method (BREEAM)
- Bronze, silver or gold issued by the German Sustainable Building Council (DGNB)
- RoGBC certificate or other certification
Special environmental financing or technology investment (as per EBRD)
- Products or equipment
- Low carbon technologies (including R&D) (e.g. smart irrigation)
- Reducing GHG emissions other than energy: fugitive emissions, carbon capture and storage, reducing emissions from industrial processes
- Adaptation to climate change - reducing vulnerabilities to the effects of climate change and increasing adaptive capacity to the new framework
- Agriculture - e.g. investments to adapt to new weather conditions and extreme climatic events through irrigation, drainage, combating and restoring soil erosion, preventing desertification, research to reduce water wastage or GHG emissions, expanding certified areas, agri-environment measures (afforestation, forest shelterbelts, cross-compliance), biomass certification, etc.
Although green finance is growing, the exposure of companies and the banking system to climate risks remains high. To support the transition to a sustainable economy, the NBR report emphasises the need for additional measures, including:
- extending green credit to areas such as agriculture, utilities and manufacturing
- incentivising investment in low-emission technologies and increasing energy efficiency
- developing insurance mechanisms to protect against climate disasters.
The NBR reports for the years 2022, 2023 and 2024 are available for consultation here
Sources of information
National Bank of Romania (NBR) - Climate Risks for the Romanian Banking Sector - 2024
National Bank of Romania (NBR) - Climate Risks for the Romanian Banking Sector - 2023
National Bank of Romania (NBR) - Climate Risks for the Romanian Banking Sector - 2022
Recommendation of the National Committee for Macroprudential Supervision No R/6/2021
