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Bank sustainability, climate change initiatives and financial performance: The role of corporate governance

Douglas A. Adu, Mohammad Abedin, Vida Y. Saa, Frank Boateng

International Review of Financial Analysis, Volume: 95, Start page: 103438

Swansea University Author: Mohammad Abedin

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DOI (Published version): 10.1016/j.irfa.2024.103438

Abstract

This study elucidates the interrelationships among corporate governance disclosure index (CORPGOVDISCIN), bank sustainability characteristics (BSCs), bank-based climate change initiatives (BCCIs) and financial performance (FP) through the lens of multi-theoretical framework. Based on a panel dataset...

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Published in: International Review of Financial Analysis
ISSN: 1057-5219
Published: Elsevier BV 2024
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URI: https://cronfa.swan.ac.uk/Record/cronfa66973
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spelling v2 66973 2024-07-07 Bank sustainability, climate change initiatives and financial performance: The role of corporate governance 4ed8c020eae0c9bec4f5d9495d86d415 Mohammad Abedin Mohammad Abedin true false 2024-07-07 CBAE This study elucidates the interrelationships among corporate governance disclosure index (CORPGOVDISCIN), bank sustainability characteristics (BSCs), bank-based climate change initiatives (BCCIs) and financial performance (FP) through the lens of multi-theoretical framework. Based on a panel dataset of 2785 observations (220 banks) from 16 Sub-Saharan Africa countries between 2007 and 2022, we observe that bank sustainability reporting framework (BSRF) and board sustainability committee (BSCOM) are positively related to increased levels of BCCIs. Second, the study shows that the BSRF-BCCIs and BSCOM-BCCIs associations are positively moderated by CORPGOVDISCIN, indicating that these relationships are contingent on the quality of the bank's corporate governance mechanisms. Third, the study then provides evidence that BSCOM is positively related to FP, but BSRF has no effect on FP. Fourth, we also observe that BCCIs disclosure has positive impact on FP, but actual BCCIs investments do not seem to improve FP. Fifth, the study detects that the association between BCCIs and FP is significantly moderated by CG mechanisms. We identify CG disclosure as the possible channel through which BCCIs and FP are interlinked. Finally, we show that the predicted relationships vary across banks' operating periods. Our findings are robust to endogeneity and selection bias concerns. Journal Article International Review of Financial Analysis 95 103438 Elsevier BV 1057-5219 Corporate governance, Bank sustainability reporting framework, Board sustainability committees, Bank climate change initiatives, Financial performance 1 10 2024 2024-10-01 10.1016/j.irfa.2024.103438 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University Another institution paid the OA fee 2024-09-12T14:22:12.2092193 2024-07-07T18:48:03.0210735 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Douglas A. Adu 1 Mohammad Abedin 2 Vida Y. Saa 3 Frank Boateng 4 66973__31282__11bc846baf14488982cc4b63ea672040.pdf 66973.VOR.pdf 2024-09-06T16:23:03.6962934 Output 910829 application/pdf Version of Record true This is an open access article under the CC BY 4.0 license true eng http://creativecommons.org/licenses/by/4.0/
title Bank sustainability, climate change initiatives and financial performance: The role of corporate governance
spellingShingle Bank sustainability, climate change initiatives and financial performance: The role of corporate governance
Mohammad Abedin
title_short Bank sustainability, climate change initiatives and financial performance: The role of corporate governance
title_full Bank sustainability, climate change initiatives and financial performance: The role of corporate governance
title_fullStr Bank sustainability, climate change initiatives and financial performance: The role of corporate governance
title_full_unstemmed Bank sustainability, climate change initiatives and financial performance: The role of corporate governance
title_sort Bank sustainability, climate change initiatives and financial performance: The role of corporate governance
author_id_str_mv 4ed8c020eae0c9bec4f5d9495d86d415
author_id_fullname_str_mv 4ed8c020eae0c9bec4f5d9495d86d415_***_Mohammad Abedin
author Mohammad Abedin
author2 Douglas A. Adu
Mohammad Abedin
Vida Y. Saa
Frank Boateng
format Journal article
container_title International Review of Financial Analysis
container_volume 95
container_start_page 103438
publishDate 2024
institution Swansea University
issn 1057-5219
doi_str_mv 10.1016/j.irfa.2024.103438
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
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description This study elucidates the interrelationships among corporate governance disclosure index (CORPGOVDISCIN), bank sustainability characteristics (BSCs), bank-based climate change initiatives (BCCIs) and financial performance (FP) through the lens of multi-theoretical framework. Based on a panel dataset of 2785 observations (220 banks) from 16 Sub-Saharan Africa countries between 2007 and 2022, we observe that bank sustainability reporting framework (BSRF) and board sustainability committee (BSCOM) are positively related to increased levels of BCCIs. Second, the study shows that the BSRF-BCCIs and BSCOM-BCCIs associations are positively moderated by CORPGOVDISCIN, indicating that these relationships are contingent on the quality of the bank's corporate governance mechanisms. Third, the study then provides evidence that BSCOM is positively related to FP, but BSRF has no effect on FP. Fourth, we also observe that BCCIs disclosure has positive impact on FP, but actual BCCIs investments do not seem to improve FP. Fifth, the study detects that the association between BCCIs and FP is significantly moderated by CG mechanisms. We identify CG disclosure as the possible channel through which BCCIs and FP are interlinked. Finally, we show that the predicted relationships vary across banks' operating periods. Our findings are robust to endogeneity and selection bias concerns.
published_date 2024-10-01T14:22:11Z
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