In recent years sustainable finance along with Environmental, Social and Governance (ESG) aspects and their implications for financial institutions have attracted the attention of academics and policy makers. The aim of the book is to bring together chapters that discuss the most recent empirical and theoretical evidence in the field, along with policy making and regulatory initiatives. The book covers topics such as the changing role of banks in the financial system, the differences between sustainable banks and traditional banks, ESG and financial performance, bank social responsibility and customer satisfaction, ESG risk management of financial institutions, the politics of climate finance and policy initiatives, and the role of bank regulators. It will be of interest to academics and policymakers working in banking, risk management, sustainable finance and related fields.
Author(s): Chrysovalantis Gaganis, Fotios Pasiouras, Menelaos Tasiou, Constantin Zopounidis
Series: Palgrave Macmillan Studies in Banking and Financial Institutions
Publisher: Palgrave Macmillan
Year: 2023
Language: English
Pages: 215
City: Cham
Preface
Contents
Notes on Contributors
List of Figures
List of Tables
The Changing Role of Banks in the Financial System: Social Versus Conventional Banks
1 Introduction
2 Social Banks in the Field
3 Empirical Studies on Social Banks
Target Clientele
Matching the Two Sides: Overcoming Information Asymmetry
Transparency and Simple Intermediation
Stakeholder Involvement
4 Theorizing the Business Model of Social Banks
Supply Side: Socially Minded Funders
Demand Side: Prosocial Borrowers
A Global Perspective on Social Banking
5 Conclusion
References
ESG Issues as Strategic Components of Long-term Success of Financial Institutions: Are There Differences in Financial Performance and Firm Value?
1 Introduction
2 Historical Overview
Assessment of ESG Risks in Lending
ESG-Related Investment
Banks and Climate Risks
3 ESG Criteria in Commercial Lending—Financial Aspects
Theoretical Background
4 ESG Integration in Financial Products and Services
ESG Investing
Impact Investing
Fossil Fuel Divestment and Engagement
Green Lending
ESG-Related Credit Risk Assessment
Green Bonds
5 Conclusion
References
Corporate Social Responsibility, Customer Satisfaction, and Customer Loyalty in Banking Institutions: A Literature Review
1 Introduction
2 Corporate Social Responsibility (CSR)
3 Customer Satisfaction
4 Customer Loyalty
5 Corporate Social Responsibility, Customer Satisfaction, and Customer Loyalty in the Banking Sector
6 CSR and Mutual Funds
7 Discussion
8 Conclusion and Future Research
References
Socially and Environmentally Responsible Investments and Mutual Funds
1 Introduction
2 Socially Responsible Investing
3 From SRI to ESG
4 ESG Criteria for SRI
Environment
Society
Corporate Governance
5 Literature Review on Social and Environmental Mutual Funds
Characteristics of Socially Responsible Mutual Funds
Behavioral Issues
The Performance of SR Mutual Funds
Portfolio Optimization for SR Mutual Funds
6 Concluding Remarks
References
Firm ESG Practices and the Terms of Bank Lending
1 Introduction
2 What Motivates Banks to Consider ESG as a Relevant Issue?
ESG and Credit Risk
ESG and Bank Value Relevance
3 What and How ESG Factors Affect Bank Lending Terms
Environmental factors and bank loans
Social Factors and Bank Loans
Governance Factors and Bank Loans
4 What are the Real Consequences of ESG Lending?
5 New Empirical Evidence on the Impact of ESG from the Bank Perspective
The Value Relevance of ESG Risks for Banks
Banks’ ESG and lending relationships
6 Conclusions
Appendix 1: List of Published and Working Papers in ESG and Cost of Bank Loan
Appendix 2: Variable Definitions
References
ESG and Credit Risk
1 Introduction
2 ESG and Credit Risk: Academic Evidence
3 ESG and Rating Agencies
The Case of Standard & Poor’s (S&P)
The Case of Fitch
The Case of Moody’s
4 Conclusions
References
The Politics of Climate Finance and Policy Initiatives to Promote Sustainable Finance and Address ESG Issues
1 Introduction
2 Background
3 Method and Research Approach
4 Analysis
International Initiatives
National Actions
Disclosure Requirements
Green Taxonomies
Sustainable Finance Regulations in Financial Institutions
Overview of the Survey Results
5 Discussion
Toward Mandatory and Internationally Harmonized Disclosure Requirements
Lack of Data to Understand Climate Risks and Growing Greenwashing Concerns
Climate-Aligned Financial Measures to Promote Green Finance
Green Bonds and the Development of Green Financial Markets
6 Conclusions
References
The Role of Bank Regulators in the Promotion of Green and Climate Finance
1 Introduction
2 Climate Risks: Why Do They Matter for Financial Stability and Monetary Policy?
3 Climate Change and Financial Supervision and Regulation
Scaling up Green Finance
Taming Climate-Related Financial Instability
Adoption of Climate-Related Financial Policies
Drivers of Diffusion of Climate-Related Financial Policies
Waves of Adoption of Climate-Related Financial Policies
4 Challenges and Shortcomings of Existing Prudential Frameworks
Assessing the Current Micro-Prudential Framework
Assessing the Current Macro-Prudential Framework
5 Climate Change and the Conduct of Monetary Policy
6 Future Research and Policy Directions
References
Index
