{"title":"The Impact of commercial banks' ESG performance: Difference between provocative and passive risk-taking – Evidence from China","authors":"Bohui Wen , Wei You , Ming Yuan","doi":"10.1016/j.ribaf.2025.102859","DOIUrl":null,"url":null,"abstract":"<div><div>In recent years, the rise of ESG concepts has gradually had an impact on economic entities, and commercial banks are also facing changes in their risk-taking behavior while practicing ESG concepts. This paper takes data of 42 A-share listed commercial banks in China from 2009Q1 to 2023Q3 to analyze the impact of ESG performance on commercial banks by distinguishing between proactive and passive risk-taking. The findings reveal that strong ESG performance promotes proactive risk-taking while suppressing passive risk-taking, ultimately reducing overall passive risk-taking. This helps improve asset quality, mitigate the risk of asset deterioration, and enhance financing functions of commercial banks. Mechanism tests show that ESG performance fosters proactive risk-taking by accumulating reputational capital, while curbing passive risk-taking through optimizing credit structures and alleviating information asymmetry. Regulatory effect analysis indicates that expanding the MPA (Macroprudential Assessment) to the green sector can moderate the positive impact of ESG performance on proactive risk-taking, preventing excessive risk-taking. This study provides recommendations for the banking industry to balance ESG practices with financial stability under the \"dual carbon\" goals.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"76 ","pages":"Article 102859"},"PeriodicalIF":6.3000,"publicationDate":"2025-03-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Research in International Business and Finance","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0275531925001151","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
In recent years, the rise of ESG concepts has gradually had an impact on economic entities, and commercial banks are also facing changes in their risk-taking behavior while practicing ESG concepts. This paper takes data of 42 A-share listed commercial banks in China from 2009Q1 to 2023Q3 to analyze the impact of ESG performance on commercial banks by distinguishing between proactive and passive risk-taking. The findings reveal that strong ESG performance promotes proactive risk-taking while suppressing passive risk-taking, ultimately reducing overall passive risk-taking. This helps improve asset quality, mitigate the risk of asset deterioration, and enhance financing functions of commercial banks. Mechanism tests show that ESG performance fosters proactive risk-taking by accumulating reputational capital, while curbing passive risk-taking through optimizing credit structures and alleviating information asymmetry. Regulatory effect analysis indicates that expanding the MPA (Macroprudential Assessment) to the green sector can moderate the positive impact of ESG performance on proactive risk-taking, preventing excessive risk-taking. This study provides recommendations for the banking industry to balance ESG practices with financial stability under the "dual carbon" goals.
期刊介绍：
Research in International Business and Finance (RIBAF) seeks to consolidate its position as a premier scholarly vehicle of academic finance. The Journal publishes high quality, insightful, well-written papers that explore current and new issues in international finance. Papers that foster dialogue, innovation, and intellectual risk-taking in financial studies; as well as shed light on the interaction between finance and broader societal concerns are particularly appreciated. The Journal welcomes submissions that seek to expand the boundaries of academic finance and otherwise challenge the discipline. Papers studying finance using a variety of methodologies; as well as interdisciplinary studies will be considered for publication. Papers that examine topical issues using extensive international data sets are welcome. Single-country studies can also be considered for publication provided that they develop novel methodological and theoretical approaches or fall within the Journal''s priority themes. It is especially important that single-country studies communicate to the reader why the particular chosen country is especially relevant to the issue being investigated. [...] The scope of topics that are most interesting to RIBAF readers include the following: -Financial markets and institutions -Financial practices and sustainability -The impact of national culture on finance -The impact of formal and informal institutions on finance -Privatizations, public financing, and nonprofit issues in finance -Interdisciplinary financial studies -Finance and international development -International financial crises and regulation -Financialization studies -International financial integration and architecture -Behavioral aspects in finance -Consumer finance -Methodologies and conceptualization issues related to finance
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