
Deloitte Greece has published the results of the credit risk impact assessment exercise from the transition of Greek businesses to the green economy entitled “Transition risk exploratory impact assessment exercise for Greek Large Corporates” prepared by the Climate & Environmental Credit Analytics team of Risk Advisory. The Assessment Exercise was based exclusively on a sample of large Greek companies and was carried out based on the framework developed by Deloitte at a global level regarding the measurement and quantification of climate and environmental risks.
In more detail, 821 large Greek companies with an annual turnover of more than 20 million euros, from 96 sub-sectors of the Greek economy, were evaluated on 31.12.2021. In the context of the exercise, the three (3) alternative scenarios of the Network for Greening the Financial System (NGFS) with a time horizon of thirty years were examined, regarding the price of carbon dioxide specifically:
orderly transition scenario
disorderly transition scenario
non-action scenario (hot house world)
Main conclusions
The main conclusion of the exercise is the fact that a late transition implies a significantly increased credit risk compared to an early transition scenario as indicated by the increase in the levels of PDs (probabilities of default).
Specifically, under the late transition scenario, PDs increase by 2.8 times (i.e. 180%) compared to their current levels, with the maximum point observed at t+18 (i.e. around 2039). On the contrary, the early transition scenario seems to lead to a maximum increase of about 88% compared to the existing levels, with the maximum point observed in time at t+12 (ie around 2033).
It is noted that under the scenario of no action no impact arises due to the risk of transition, but it should be noted that the final impacts should take into account the aggravation of natural risks, which were not taken into account in the context of this exercise.
With regard to the impact at the level of economic sectors, it appears that the greatest impact is found in those of energy, mines and quarries, construction, as well as transport, which are mostly characterized as carbon dioxide emission intensive sectors (carbon intensive sectors).
With reference to the main determining factors of the impact beyond the intensity of emission of carbon dioxide pollutants (carbon intensity), the analysis shows that the existing levels of profitability are also an important determining factor (driver) of the impact which is consistent with business logic as it was observed that profitably robust businesses show greater resilience on the way to their transition under any scenario.
According to Spyridon Bisisidis, Partner, Financial Risk Management Leader, Risk Advisory, Deloitte: “The transition to the green economy is in itself a prime business opportunity for financial institutions to achieve business growth through plan financing transition of their customers. In this context, the measurement of climate and environmental risks is a matter of major importance in order to draw useful conclusions regarding the dynamics of the sectors (sector dynamics), as well as the level of resilience (level of resilience) of the creditors in order to optimize the business decision-making process and the effective management of these risks by financial institutions”.


Latest News

Trump Tariffs Jeopardize Growth: Piraeus Chamber of Commerce
The tariffs, aimed at reducing the U.S. trade deficit, are expected to have both direct and indirect effects on the European economy

EU Condemns Trump Tariffs, Prepares to Retaliate
As tensions escalate, the EU is expected to continue negotiations with Washington while preparing for potential economic retaliation.

The Likely Impact of Trump Tariffs on Europe and Greece
Trump tariffs are expected to negatively affect economic growth in the Eurozone while Greece's exports could take a hit.

Motor Oil Results for 2024: Adjusted EBITDA of 995 mln€; Proposed Dividend of 1.4€ Per Share
Adjusted EBITDA for 2024 was down 33% yoy. The adjusted profit after tax for 2024 stood at 504 million euros, a 43% decrease from the previous year

Cost of Living: Why Greece’s 3% Inflation Is Raising Alarm
Greece appears to be in a more difficult position when it comes to price hikes, just as we enter the era of Trump’s tariffs.

Fitch Ratings Upgrades the Four Greek Systemic Banks
NBG’s upgrade reflects the bank’s ongoing improvements in its credit profile, Fitch notes in its report, including strong profitability, a reduction in non-performing exposures (NPEs), and lower credit losses

Trump to Announce Sweeping New Tariffs Wednesday, Global Retaliation Expected
With Trump's announcement just hours away, markets, businesses, and foreign governments are bracing for the fallout of one of the most aggressive shifts in U.S. trade policy in decades.

Inflation in Greece at 3.1% in March, Eurostat Reports
Average inflation in the eurozone settled at 2.2%, compared to 2.3% in February

Greece’s Unemployment Rate Drops to 8.6% in February
Despite the overall decline, unemployment remains higher among women and young people.

Jerry Kalogiratos Highlights Key Role of Energy Transition and Data Demand in LNG Outlook
Energy transition and the prospects of LNG were discussed at Capital Link’s 19th Annual International Maritime Forum, during a panel discussion with Jerry Kalogiratos (Capital Clean Energy Carriers Corp.)