TY - JOUR
T1 - Environmental risk management and financial performance in the banking industry
T2 - A cross-country comparison
AU - Finger, Maya
AU - Gavious, Ilanit
AU - Manos, Ronny
N1 - Funding Information:
This paper was presented at the 2016 Cross Country Perspectives of Finance conferences held in Taiyuan and Pu’er, China. The authors thank the Editors Gady Jacoby and Zhenyu Wu as well as two anonymous referees. We have also benefited from the comments of Diane Romm, Israel Drori, workshop participants at Guilford Glazer Faculty of Business and Management, Ben-Gurion University, Israel as well as the Journal of International Financial Markets, Institutions and Money Special Issue Conferences and Forum – Financial Innovation in Yunnan Province conference on Cross Country Issues on Credit, Banking, Asset Pricing, and Market Liquidity, China. We gratefully acknowledge the financial support of the Guilford Glazer School of Business and Management at Ben-Gurion University and of The School of Business Administration, The College of Management Academic Studies. All errors remain our responsibility.
Publisher Copyright:
© 2017 Elsevier B.V.
PY - 2018/1/1
Y1 - 2018/1/1
N2 - The Equator Principles (EP) provide banks with environmental guidelines for project finance. Distinguishing between banks from developed and developing countries, we analyse the effect of EP adoption on performance. Two sets of hypotheses for each sub-sample of banks are developed and tested using comparison analyses, event-study methodology and two-stage selection modelling. We find that in developed (developing) countries, EP adoption is associated with an increase (decrease) in funding activity and in the share of income from interest. These results indicate that EP adoption is a strategic decision for banks in developing countries, and a form of greenwashing in developed countries.
AB - The Equator Principles (EP) provide banks with environmental guidelines for project finance. Distinguishing between banks from developed and developing countries, we analyse the effect of EP adoption on performance. Two sets of hypotheses for each sub-sample of banks are developed and tested using comparison analyses, event-study methodology and two-stage selection modelling. We find that in developed (developing) countries, EP adoption is associated with an increase (decrease) in funding activity and in the share of income from interest. These results indicate that EP adoption is a strategic decision for banks in developing countries, and a form of greenwashing in developed countries.
KW - Corporate social responsibility
KW - Cross-country
KW - Environmental risk management
KW - Equator principles
KW - Financial institutions
KW - Financial performance
UR - http://www.scopus.com/inward/record.url?scp=85029649424&partnerID=8YFLogxK
U2 - 10.1016/j.intfin.2017.09.019
DO - 10.1016/j.intfin.2017.09.019
M3 - Article
AN - SCOPUS:85029649424
SN - 1042-4431
VL - 52
SP - 240
EP - 261
JO - Journal of International Financial Markets, Institutions and Money
JF - Journal of International Financial Markets, Institutions and Money
ER -
