ESG relevance in credit risk of development banks

Porenta, Jan (author), Rant, Vasja (author)

This paper investigates relevance of Environmental, Social, and Governance (ESG) risks in the context of banks' credit risk. Focusing on a global sample of 567 banks, including 40 development banks, we aim to discern nuances in ESG relevance scores between different bank types. Our findings highlight distinct differences between national and multilateral development banks, with ESG risk significantly influencing credit risk in the latter. Notably, social and governance factors play pivotal roles in shaping credit profiles. Development banks, at the forefront of promoting good ESG practices, face heightened exposure and risks. This paper contributes to the understanding of the evolving dynamics of ESG impact on creditworthiness.

• Language: English
• Keywords: banks, banking, crediting, sustainable development, development banking, socio-economic development, ESG relevance, credit risk, sustainable finance
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: EF - School of Economics and Business
• Publication status: Published
• Publication version: Version of Record
• Year: 2025
• Number of pages: 17 str.
• Numbering: Vol. 76, art. 102831
• PID: 20.500.12556/RUL-167803
• UDC: 336.71
• ISSN on article: 0275-5319
• DOI: 10.1016/j.ribaf.2025.102831
• COBISS.SI-ID: 227137027
• Publication date in RUL: 13.03.2025

Record is a part of a journal

• Title: Research in international business and finance
• Shortened title: Res. int. bus. financ.
• Publisher: Elsevier
• ISSN: 0275-5319
• COBISS.SI-ID: 512590361

Licences

• License: CC BY-NC-ND 4.0, Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
• Link: http://creativecommons.org/licenses/by-nc-nd/4.0/
• Description: The most restrictive Creative Commons license. This only allows people to download and share the work for no commercial gain and for no other purposes.

Secondary language

• Language: Slovenian
• Keywords: banke, bančništvo, kreditiranje, trajnostni razvoj

Projects

• Funder: ARIS - Slovenian Research and Innovation Agency
• Project number: P5-0161
• Name: Izzivi vlagateljev, podjetij, finančnih institucij in države v negotovem evropskem gospodarskem okolju

• Funder: ARIS - Slovenian Research and Innovation Agency
• Project number: V5-2261
• Name: Modeliranje vplačil novih virov lastnih sredstev EU po državah članicah