Chapter 08 · Finance, data & evidenceSustainable Finance & Investment
Green asset ratio (GAR)
Definition
Green asset ratio is a banking disclosure metric that compares taxonomy-aligned assets with eligible assets or total covered assets under a specified framework.
References
For credit institutions, the Green Asset Ratio (GAR) shows the proportion of covered assets financing or invested in EU Taxonomy-aligned economic activities. It is disclosed using the prudential-consolidation scope and includes stock and flow information.
EU Taxonomy RegulationCommission Delegated Regulation (EU) 2021/2178, Annex V, points 1.1 and 1.2.1 · verified 2026-08-23Official text
This reference provides supporting context for how “Green asset ratio (GAR)” is defined and used.
Overview
What it means in practice
Green asset ratio (GAR) should be read as a sustainable-finance term. Its meaning depends on the instrument, mandate, metric, disclosure framework and evidence of use or outcome.
In practice, users should state the boundary, actor, method and evidence. That keeps green asset ratio (gar) specific enough for review without turning it into a broader claim.
Why it matters
Green asset ratio (GAR) matters because finance labels can influence capital allocation, product claims and accountability. Clear boundaries help distinguish ambition, method, measurement and realised outcome.
Common misconception
A common error is to use Green asset ratio (GAR) without stating the financial product, portfolio boundary, metric or disclosure rule. Those details often determine the claim.
Review questions
Who or what is covered by the term? What evidence supports it? What limitation, method or affected group would change how a reader interprets the claim?
How it is used
In professional practice, “Green asset ratio (GAR)” helps investors, lenders, analysts, data providers and sustainability teams describe or assess a banking disclosure metric that compares taxonomy-aligned assets with eligible assets or total covered assets under a specified framework. It is commonly encountered in capital allocation, risk assessment, measurement, valuation, due diligence and performance analysis.
A credible application identifies the calculation method, data provenance, assumptions, boundary and decision purpose.