Corporate green investment imperative and risk of a credit crunch in Poland

• Published in: Scientific Papers of Silesian University of Technology. Organization and Management Series Vol. 2021; no. 154; pp. 233 - 248
• Main Authors: PYKA, Irena, PYKA, Jan
• Format: Journal Article
• Language: English
• Published: 2021
• DOI: 10.29119/1641-3466.2021.154.17
• ISSN: 1641-3466

Purpose: The main subject of the article is a phenomenon that is increasingly common in countries of the global economy referred to as the so-called credit crunch. The study analyses the reasons that favour the escalation of risk of a credit crunch in the banking systems. The main objective of the article is to expose them as widely as possible, combining it with verification of the determinants of a credit crunch. Design approach: The empirical research conducted in this study focuses on the Polish banking system. For the first time the credit crunch was observed there in the second half of 2008. It was then that lending to households decreased by 25% and to enterprises by as much as 33%. In the Polish banking system, a drop in the volume of loans to enterprises has been observed for a long time, favouring the increase in risk of a credit crunch. Findings: The article evaluates the potential risk of a credit crunch in the Polish banking system pointing out their links resulting from the implementation of the new climate policy in the European Union as well as the COVID-19 pandemic. This is caused by the fact that during the COVID-19 crisis, credit rating of Polish enterprises decreased significantly, causing partial restrictions or even elimination of bank loan in industries threatened by the crisis. Research implication: The Polish economy is facing a significant challenge of meeting the EU criteria for limiting CO2 emissions, which will force domestic enterprises to invest considerably in environmental protection and will increase their demand for debt financing, including bank loans. Banks are preparing for green lending to the Polish economy which signifies a strong transition of loans to investments which meet the taxonomy criteria and are therefore subject to climate objectives. Practical and social implication: Industry risk will determine lending of Polish enterprises under the conditions of the European Green Deal. Green financing of investments of Polish enterprises is therefore becoming a significant potential cause of increasing risk of a credit crunch in the Polish banking sector. Originality/value: Presentation of the enterprise credit dilemmas in the conditions of financial instability of the global economy in the perspective of credit-crunch in Poland is a novel, original and contemporary subject. The diagnosis of the determinants of this threat has facilitated their positioning relatively to the risk of credit-crunch in the Polish banking sector. The results of this analysis underline the risks in this sector and the consequences of introducing European taxonomy of green investments as factors limiting credit actions and enterprise credits in banks.