Description
Synchronised and in concordance with the European Union’s Green Deal, the European Investment Bank (EIB) proclaimed its turn into a ‘Climate Bank’ in November 2019. Thereafter, the bank pledged to double its climate lending to 50% by 2025. Conversely, the bank has not committed to any green borrowing targets, despite being the pioneer and largest issuer in outstanding green bonds.
The proceeds of green bonds are ring-fenced for climate-related investment and strictly monitored. For its climate orientation the EIB could have easily and ‘silently’ increased further its green borrowing, for on-lending its green-borrowing to climate-related projects, under capital markets’ scrutiny and oversight. Instead the EIB privileged a bold public announcement, associated exclusively with lending-related targets and milestones. The question that arises is why did the EIB opt for the bold over the ‘silent’ climate metamorphosis. Drawing on the resource dependence theory, the paper examines why the EIB based its climate future on its lending instead of the borrowing side.
