Greek enterprises face significant increase in credit risk from their transition towards the green economy, Deloitte Greece said in its “Transition risk exploratory impact assessment exercise for Greek Large Corporates” survey conducted by its group of Climate & Environmental Credit Analytics of Risk Advisory.
The evaluation test was conducted on a sample of 821 large Greek enterprises with an annual turnover of more than 20 million euros in 2021, from 96 sub-sectors of the economy. The test examined three alternative scenarios of the Network for Greening the Financial System (NGFS) with 30-year horizon on the price of CO2. The three scenarios are: orderly transition, disorderly transition and hothouse world.
The main conclusion of the test is that a disorderly transition will lead to a significantly higher credit risk compared with an orderly transition scenario, as shown in the increase of PDs (probabilities of default). Under the disorderly scenario, PDs rise by 2.8 times (or 180%) compared with their current levels, to reach t+18 in 2039, while under the orderly scenario PDs rise by 88%, reaching t+12 in 2033.
Under the non-action scenario, there is no impact on the transition risk, but final impact should evaluate the worsening of natural risks.
The largest impact will be recorded in the energy, mining, construction and transport sectors (carbon-intensive sectors).
SOURCE; ANA-MPA
