« October 2021 »
| Su | M | Tu | W | Th | F | Sa |
|---|---|---|---|---|---|---|
| 1 | 2 | |||||
| 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| 10 | 11 | 12 | 13 | 14 | 15 | 16 |
| 17 | 18 | 19 | 20 | 21 | 22 | 23 |
| 24 | 25 | 26 | 27 | 28 | 29 | 30 |
| 31 |
Banks’ voluntary Commitment towards Environmental Sustainability: Pivotal Move or Greenwash?
- Location:
- Teams - Online
- Time:
- Wednesday 13 October 2021, 12:10–13:00
- Contact:
- Dr Corinna Patterson: c.patterson@bangor.ac.uk
Wednesday 13th October 2021
12.10 - 1.00pm
Are the voluntary initiatives adequate to encourage the banks to keep their commitments towards the climate change and greener economy issues? In addressing this major question, we match 56K syndicated loan-level data to 6K listed firm-level data (2002-2020) covering 82 countries to assess whether the lead managers in particular the UNEP FI signatories charge less to the eco-friendly (green) firms compared to the non-eco-friendly (brown) firms. Our results indicate that the UNEP FI signatory first-lead managers charge a significantly higher price for the non-eco-friendly borrowers while their impact on setting the loan price for eco-friendly banks is insignificant. Further, if all the lead managers of a loan contract are UNEP FI members, they would charge 18bp lower (31bp higher) interest for the eco-friendly (non-ecofriendly) borrowing firms. However, the picture is not universal. Investigating further by taking into consideration of country specification of the lead banks, we find that EU28 based lead banks would likely charge higher for eco-friendly firms while lower for non-eco-friendly firms, while the US lead banks act oppositely. Our findings indicate that mere voluntary initiatives cannot bring any noteworthy uniform impact on setting the carbon premium within the loan pricing mechanism while taking lending decisions. Therefore, universal mandatory regulatory measures e.g., added capital requirements, are needed to introduce so that irrespective of their location as well as the corporate objectives, banks have to comply with unique environmental regulations. Thus, our study offers new insights to the government and financial regulators and policymakers in addressing the environmental and carbon risks associated with lending decisions.
Please click here to join the seminar
http://plocc.bangor.ac.uk/index.php.en