Climate risk is the negative effect of climate change on several aspects of the environment, business, and society. There are two categories of climate risks: physical risks include direct impacts due to extreme events and chronic changes due to climate modifications that have become commonplace; the transition risk arises from the economic and regulatory adjustments required to shift toward reducing greenhouse gas emissions and the transition to renewable energy. The problem, in financial terms, is the correct assessment and quantification of transition risk, as it is not univocal in the literature. This research aims to provide a literature review on transition risk that permits filling this gap and identifying the proxies used for its representation and evaluation. Moreover, the analysis considers the critical aspect of the connection between transition and credit risk, as firms exposed to high transition risks may face challenges in maintaining creditworthiness. Results highlight the most commonly used proxies, including carbon pricing, CO₂ or GHG emissions, and metrics from various databases. However, the findings emphasize the importance of integrating these indicators with broader factors, such as a company’s negative environmental impacts (e.g., waste production and water usage) and delays in technological adaptation from a forward-looking perspective.

Do tail events in the oil market trigger extreme responses by the clean-energy financial market (and vice versa)? This paper investigates the relationship between oil price and clean-energy stock with a novel methodology, namely extreme events study. The aim is to investigate an asymmetry effect between the response to good versus bad days. The results show how the two markets influence each other more negatively, i.e., extreme negative events significantly impact the other market. Furthermore, we document how the impact of the shock transmitted by oil prices to clean-energy stocks is less than the amount of shock transmitted oppositely. These findings have important implications for investor and renewable energy policies.

Currently, energy consumption has increased exponentially. Using fossil fuels to produce energy generates high shares of carbon dioxide emissions and greenhouse gases. Moreover, financial authorities at the global and European levels have recognized that climate change poses new risks for individual financial institutions and financial stability. The analysis contributes to the literature in two critical ways. First, the research attempts to develop a map of the transition risk of the EU. In detail, it defines an indicator that will identify the transition risk the EU bears. Second, it analyzes any relationships between the CO₂ emissions, economic growth, and the renewable energy of each European country from 1995 to 2020, highlighting the short and long-run relationships. The methodology used is the ARDL. The results show the long-run relationship between GDP, renewable energy consumption, and CO₂ emissions is evident. Indeed, economic growth may increase environmental pollution in Europe, while an increase in using renewable energy may reduce CO₂ emissions. Therefore, this implies the trade-off between economic development and CO₂ emissions. Furthermore, the results indicate the difference in the short-run relationship across countries. However, the results demonstrate that the choice of the European Union to increase the use of renewable energies is more than fair.

In a European context in which the objectives of climate neutrality and digitalization appear fundamental, the work analyzes the relationships between the price of the main stock market indices and the most representative variables such as carbon emissions, digitalization, use of renewable energy, research and development expenses, environmental taxes, and all economic and management activities aimed at reducing or eliminating any form of pollution. The analysis was developed through three different regressions involving the long period 1995–2020 and the short period 2017–2020. The results show how increasing carbon emissions and environmental taxes positively impact stock indices. The former is linked to an increase in production and, therefore, economic growth, and the latter encourages sustainability. Taxes on transport and energy in the long term generate higher costs, which damage profitability and negatively impact the performance of stock indices. Finally, in the short term, implementing environmental protection measures or the sustainable management of resources may lead to higher operating costs for the companies involved. These cost increases can negatively impact profit margins and reduce the value of companies. These results, therefore, show us how environmental sustainability has a significant impact on European stock markets; consequently, the relevant regulations and policies should also consider the economic and managerial impacts that companies implement to achieve their objectives of the Green Deal.

Internet Banking has become an important alternative to traditional banks. This article studies how Internet Banking’s use influenced European banks’ profitability and if the phenomenon of the branches’ strong contraction (started in 2009 and consolidated from 2011 to 2016) depended on using these technologies or the economic crisis of the period. The exclusion of the COVID-19 crisis derived from the voluntariness to analyze the branches’ reduction in your primitive form and not as a consequence of the event’s extreme. The sample data comprises 3679 European banks from 2011 to 2016. The methodology used is the instrumental variables. This approach can control internal validity threats, such as confounding variables, measurement error, spuriousness, simultaneity and reverse causality. The results show that Internet Banking has positively influenced the net interest income and negatively affected the distribution of the branches, justifying the strong reduction. Surprisingly, the insignificance of GDP rates on the branch network, while the strong European prudential regulation had a negative impact. The study of Internet Banking’s impact on the branches is a new aspect and important for further developments. As transactions are handled online, branch offices will become more like service lounges rather than rows of tellers handling daily transactions.