Analyzing the Role of Banks in Providing Green Finance for Retail Customers: The Case of Germany

Our study investigates the role of banks in mobilizing investments in the energy transition with German retail customers. Based on a screening of a representative sample of 329 banks and follow-up in-depth interviews with 12 sector experts, our study shows that there are hardly any sustainable finance products offered. This is due to high transaction costs, missing information about energy projects and missing financial products which allow the bundling of small deposits and de-risking. To develop market supply for this segment, sector experts call for increased transparency in clean energy projects. Standardized, comprehensive and comparable labels or certifications for financial products seem to be necessary to lower uncertainty barriers with retail customers. EU action such as the Taxonomy Regulation is seen as necessary, but not sufficient to meet this demand. The German case delivers insights for other countries in Europe and globally, as sustainability finance challenges all signatories of the Paris Climate Agreement.