Journal article 509 views 116 downloads
Financing sustainability: Sustainable institutional investors and bank loan access
Suyang Li 
,
Lu Qiao,
Boru Ren ,
Zilong Wang
,
Lu Qiao,
Boru Ren ,
Zilong Wang
Journal of International Money and Finance, Volume: 157, Start page: 103387
Swansea University Authors:
Suyang Li , Boru Ren
-
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DOI (Published version): 10.1016/j.jimonfin.2025.103387
Abstract
This study examines the role of sustainable institutional investors in enhancing portfolio firms’ access to bank loans. Utilising the Principles for Responsible Investment (PRI) signatory status as a marker of commitment to responsible investing, we find that being held by these responsible investor...
| Published in: | Journal of International Money and Finance |
|---|---|
| ISSN: | 0261-5606 1873-0639 |
| Published: |
Elsevier BV
2025
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| Online Access: |
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| URI: | https://cronfa.swan.ac.uk/Record/cronfa69776 |
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2025-06-19T15:07:37Z |
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| last_indexed |
2025-07-08T04:59:54Z |
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2025-07-07T13:48:33.0162815 v2 69776 2025-06-19 Financing sustainability: Sustainable institutional investors and bank loan access 0c924dea244797f46786a96493c37030 0000-0002-4057-3394 Suyang Li Suyang Li true false 73321f2d7e2e1c7bd4be9bf6d47fd2a2 0000-0001-8647-9689 Boru Ren Boru Ren true false 2025-06-19 CBAE This study examines the role of sustainable institutional investors in enhancing portfolio firms’ access to bank loans. Utilising the Principles for Responsible Investment (PRI) signatory status as a marker of commitment to responsible investing, we find that being held by these responsible investors not only enables firms to borrow more but also at a lower cost. Further analysis shows that the advantages in loan market access are due to the presence of sustainable institutional investors serving as a signal of the credibility of firms’ ESG profiles, which aligns long-term growth goals and reduces shareholder-creditor conflicts. Being held by sustainable institutional investors also allows firms to avoid green and sustainability-linked loans that, whilst supporting their ESG development, require stricter monitoring than conventional loans. Additionally, we document that the negative relationship between sustainable investors and carbon emissions is more pronounced for firms that have obtained loans compared to those without. Overall, this study highlights the importance of financing support for sustainable institutional investors in fulfilling sustainability commitments and highlights the synergy between different financial markets in curbing carbon emissions. Journal Article Journal of International Money and Finance 157 103387 Elsevier BV 0261-5606 1873-0639 Sustainable institutional investor; Socially conscious investor; Loan cost; Borrowing cost; ESG; Climate awareness; Carbon emission 1 8 2025 2025-08-01 10.1016/j.jimonfin.2025.103387 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University SU Library paid the OA fee (TA Institutional Deal) Swansea University 2025-07-07T13:48:33.0162815 2025-06-19T16:01:37.9064298 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Suyang Li 0000-0002-4057-3394 1 Lu Qiao 2 Boru Ren 0000-0001-8647-9689 3 Zilong Wang 4 69776__34688__2871428c035a4d09b67b4204e5575a1f.pdf 69776.VoR.pdf 2025-07-07T13:45:18.7141372 Output 919805 application/pdf Version of Record true © 2025 The Author(s). This is an open access article under the CC BY license. true eng http://creativecommons.org/licenses/by/4.0/ |
| title |
Financing sustainability: Sustainable institutional investors and bank loan access |
| spellingShingle |
Financing sustainability: Sustainable institutional investors and bank loan access Suyang Li Boru Ren |
| title_short |
Financing sustainability: Sustainable institutional investors and bank loan access |
| title_full |
Financing sustainability: Sustainable institutional investors and bank loan access |
| title_fullStr |
Financing sustainability: Sustainable institutional investors and bank loan access |
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Financing sustainability: Sustainable institutional investors and bank loan access |
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Financing sustainability: Sustainable institutional investors and bank loan access |
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0c924dea244797f46786a96493c37030_***_Suyang Li 73321f2d7e2e1c7bd4be9bf6d47fd2a2_***_Boru Ren |
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Suyang Li Boru Ren |
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Suyang Li Lu Qiao Boru Ren Zilong Wang |
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Journal of International Money and Finance |
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157 |
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10.1016/j.jimonfin.2025.103387 |
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Elsevier BV |
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This study examines the role of sustainable institutional investors in enhancing portfolio firms’ access to bank loans. Utilising the Principles for Responsible Investment (PRI) signatory status as a marker of commitment to responsible investing, we find that being held by these responsible investors not only enables firms to borrow more but also at a lower cost. Further analysis shows that the advantages in loan market access are due to the presence of sustainable institutional investors serving as a signal of the credibility of firms’ ESG profiles, which aligns long-term growth goals and reduces shareholder-creditor conflicts. Being held by sustainable institutional investors also allows firms to avoid green and sustainability-linked loans that, whilst supporting their ESG development, require stricter monitoring than conventional loans. Additionally, we document that the negative relationship between sustainable investors and carbon emissions is more pronounced for firms that have obtained loans compared to those without. Overall, this study highlights the importance of financing support for sustainable institutional investors in fulfilling sustainability commitments and highlights the synergy between different financial markets in curbing carbon emissions. |
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2025-08-01T05:29:04Z |
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