Work

Bank credit loss and ESG performance

Year: 2023

Type: article

Abstract: We study the impact of ESGC scores on Non-performing loans (NPLs) for a sample of European listed banks over the period 2002-2020. Relying on two different types of instrumental variables and fractional logit estimations, we find that banks with greater levels of the ESGC score have higher levels of NPLs. The main effect goes through the Governance pillar and Controversies components. Our findings suggest that even if ESGC practices may enhance bank value and stability, a negative effect may directly emerge from the loan loss channel.

Source: Finance research letters

DOI: 10.1016/j.frl.2023.104719

Authors: Elena Bruno, Giuseppina Iacoviello, Caterina Giannetti

Institution: University of Pisa

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,930

Funder: Università di Pisa