According to the NBR report, green loans accounted for 4.3% of the annual flow of loans to non-financial companies. The main destination of green loans is green buildings, 54% of the total.

From a sectoral perspective, most green loans go to the real estate sector, 50% of the total, followed by utilities (18%) and manufacturing (10%).

For households, green loans amounted to around RON 10 billion in September 2024, +50% compared to September 2023, and accounted for 5.7% of the bank loan portfolio to this segment.

The value of global green bond issuance increased by 6.5% at end-November 2024 compared to the full year 2023, but will remain below the historical peak in 2021. In Romania, there were seven green bond issues in 2024, totaling €8.1 billion, issued by the Romanian government.

The report states that Romania's 2022 emissions were 41% of the 1990 level, the lowest in the last 24 years, meeting the target of reducing emissions by at least 55% compared to 1990 levels, as set by the Paris Agreement. Increasing relevant investments in decarbonizing the economy is likely to contribute to achieving the objective of climate neutrality by 2050, given the decelerated pace of GHG emission reductions in recent years.

Carbon use productivity and output-based carbon intensity continue to place Romania at a favorable level compared to the countries in the region, with positive developments in both indicators tracked by the OECD in terms of decarbonizing the economy. For Romania, carbon productivity measured as real GDP generated for each unit of CO2 emitted was $8.41/kg compared to a regional average of $5.3/kg.

Renewable energy is above the regional or EU average, but the gap has narrowed significantly over the last four years. The most important type of renewable energy for Romania continues to be hydrological energy, which is, however, affected by the increasingly frequent extreme climatic events such as droughts.

In terms of trade in technological goods that contribute to pollution control and resource management, essential for a transition to a green economy, Romania is below the regional average. Both total trade and trade balance show negative developments in the period 2022-2023, in contrast to Hungary and the Czech Republic, which show significant increases. Also in 2023 the main sectors after energy consumption are industry and transportation. Exports of fossil fuels as a share of total exports decrease in both Romania and the rest of the countries in the region in 2023, after a significant jump a year ago.

The new updated version of the climate scenarios, published by the Network for Greening the Financial System (NGFS) on October 31, 2024, shows the same trend of decreasing GDP for Romania in each of the five scenarios analyzed. Compared to the previous version, the magnitude of the deterioration of the economy is more significant, exceeding -10% for three out of five scenarios at the 2050 horizon.

The main physical risks assessed for Romania concern floods, droughts and high temperatures. For floods, 23 medium and high risk counties have been identified. Non-financial companies in sectors vulnerable to flood risk generated 12.7% of gross value added (GVA) at the aggregate level in 2023 and hold 13.2% of total assets.

In terms of drought, 31 medium and high risk counties have been identified. In these counties, non-financial companies in sectors vulnerable to this risk generated 2.3% of gross value added (GVA) at the aggregate level in 2023 and hold 5.2% of total assets.

The analysis identified 30 counties in Romania with medium and high risk to high temperatures. The contribution to the economy of non-financial companies in sectors vulnerable to this risk is important. At the end of 2023, these firms produced 10.4% of gross value added (GVA) at the aggregate level and held 9.5% of total assets.

According to the paper, average annual temperatures continued to increase in 2023, both globally and in
by 1.7 and 2.6 degrees Celsius, respectively, above the 1951-1980 average temperatures. The year 2023 was the warmest year on record in Romania, according to several meteorological measuring stations. In 2023, Romania lost through deforestation 25.1 kilohectares of forests nationwide, with Suceava County having the highest forest loss (15%).

Romania's climate change preparedness according to the ND-GAIN index, developed by the University of Notre Dame, showed a modest increase in 2022 compared to the previous year, while the vulnerability indicator remains constant. According to international institutions, no disasters caused by climate change were recorded in 2022 in Romania, in line with the methodology used, but 2023 was marked by the intensification of storm-type phenomena.

The economic damage suffered by the European Union countries amounted to €43.9 billion in 2023, with most of the recorded disasters being floods. Between 1980 and 2023, Romania suffered total economic losses amounting to €19.6 billion (€82,000/square kilometer compared to a European average of €193,000/square kilometer), of which only 1% was covered by insurance.

According to the cited source, climate-relevant non-financial companies (brown) are of high importance for Romania's economy, similar to previous years. In 2023, these companies, holding 48% of the assets and employing 32.6% of the total employees of non-financial companies, generated 40.6% of the gross value added at aggregate level. The financial performance of brown companies deteriorated in 2023 compared to previous years, with developments in line with those at the aggregate level. However, the profitability of brown companies remains below that of non-financial companies as a whole.

The leverage ratio of brown companies, calculated as debt as a share of total assets, declined in 2023 by 1 percentage point from 2022 to 59%. Overall liquidity improved marginally by 1 percentage point to 110.5%, which is below the aggregate level (117.7%). At the same time, the recovery period for receivables increased to 113 days (+11 days compared to 2022), 31 days more than the value of this indicator for all non-financial corporations.

Bank exposure to brown companies continued to increase between September 2023 and September 2024 at a moderate pace, relatively close to that at the aggregate level. Thus, at the end of September 2024, the exposure to these companies reached RON 104.5 billion (+6.2% compared to September 2023) and accounted for 51.7% of the total stock of credit extended to non-financial companies. Relative to the portfolio as a whole, the share of these exposures is 0.4 percentage point lower than in the corresponding month of the previous year. In 2022, bank-financed CO2 emissions remained relatively constant compared to 2021 (about 820 thousand tons of CO2), but as the value of the corporate portfolio increased, its carbon footprint slightly decreased from 4.9 tons/million lei in 2021 to 4 tons/million RON in 2022.

The non-performing loan ratio (NPL ratio) of brown companies was 3.5% in September 2024 (-0.2 percentage points from September 2023), still below the aggregate level of 3.8%. In contrast, the probability of default for brown companies was 0.4 percentage point above the aggregate level in September 2024.