METHODOLOGY FOR GRANTING GREEN BUSINESS CREDITS

Abstract

In the face of negative changes in climate change and the natural environment, the financial system is obliged to change its financial mechanisms as efficiently as possible to help the economy transform according to the green rate concept. The taxonomy published by the EU (2021) is an economic classifier, with the help of which businesses can transform their processes and banks can select green projects. Sustainability and the fight against climate change is one of the strategic directions of the Bank of Lithuania, so in order to achieve better results, it would be appropriate to combine state and business investments. And although the sustainability of business activities is becoming a priority, commercial banks providing loans do not yet have clear criteria or a unified evaluation system for distinguishing environmentally friendly business. In Lithuania, the banking sector is guided by ESG principles, the EU taxonomy regulation, and other autonomously created criteria that allow to decide whether to promote one or another business that could potentially create not only financial, but also additional, sustainable ecological returns. According to the principles of UN Responsible Banking, there are already actively committed banks that contribute to the UN Sustainable Development Goals and the Paris Agreement for integrated sustainability as a natural element necessary in the long term. The article analyzes the current topic of the green exchange rate in the banking sector, uses the systematization and comparative analysis of scientific literature. The concept of green finance is discussed; changes in bank activities and a new look at creditable businesses according to the green rate standard and the transformation of banks through the criteria of their activities.