Green Stocks and the 2023 Banking Crisis

In prior financial and economic crises such as the Global Financial Crisis and COVID-19, environmentally responsible stocks performed well or at least neutrally. Were they also resilient as another banking crisis began unfolding with the collapse of Silicon Valley Bank (SVB) and Signature Bank? Or did they suffer because of the important role that these and other regional banks play for the clean tech sector? We find that stocks with more opportunities in the transition to a low-carbon economy performed worse in the 2023 crisis. Investors favored firms with low debt. Overall, the market appears to anticipate that the (regional) banking sector stress will curtail climate tech development