The Role of Environmental Cost Information in Reducing Bank Credit Risk Analytical Study of the Opinions of a Sample of Credit Analysts in the Banks of the Province of Erbil, Iraq

Abstract

The information of cost and economic analysis is consider the key of formulating policies, decision-making and the adoption of investment programs, as a result of the high rates of pollutants and the variety of forms which different types lead to increasing concentrations, especially in recent years, prevention and treatment of its effects have become the concern of various countries and companies, took the environmental costs resulting from those pollutants constitute high rates As a result of the costs incurred by the company, information on these costs can no longer be ignored in line with the polluter pays principle. These costs affect the company's profitability and investment returns. In this sense, the decisions that were traditionally taken to ignore the environmental costs as hidden costs tainted by some inaccuracy, from this point of view environmental cost information is taking over the new visions of economists, businessmen and banks granting credit when making their decisions, so that they are not inattentive to the requirements Environmental legislation that may oblige the company to incur additional costs was not taken into account as a result of neglect of the environmental side at the time, turning it from profitable to losing companies, especially since bank credit is the main source of operating profit, but it is fraught with Failure to identify and measure costs related to protecting the environment, reducing pollution or controlling it, eliminating its past effects and not disclosing it as hidden costs makes decision-making regarding the granting of credits improper and threatened by unexpected and sudden risks that may lead to the closure of borrowing companies and the transfer of loans granted or Credits to bad debts are deducted from the operating profit of the granting bank because of lack of information on environmental costs or ignoring them. In this research, the researchers sought to demonstrate the importance of environmental cost information in rationalizing credit decisions and its impact on reducing the degree of risk.