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Climate-Related Disclosure and Bank Performance: Does Bank Type Matter?

Rasim Simsek, Sabur Mollah, Tunyi Tunyi Abongeh Orcid Logo

Business Strategy and the Environment

Swansea University Author: Tunyi Tunyi Abongeh Orcid Logo

Abstract

This paper investigates whether climate-related disclosure (CRD) affects the financial performance of conventional banks (CBs) and Islamic banks (IBs) differently. Using a unique hand-collected dataset on CRD for 591 banks (422 CBs and 169 IBs) from 24 countries over a four-year period, we examine h...

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Published in: Business Strategy and the Environment
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URI: https://cronfa.swan.ac.uk/Record/cronfa72059
first_indexed 2026-06-11T10:21:28Z
last_indexed 2026-06-12T13:21:37Z
id cronfa72059
recordtype SURis
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spelling 2026-06-11T11:21:27.1088156 v2 72059 2026-06-11 Climate-Related Disclosure and Bank Performance: Does Bank Type Matter? eefe2792c8eed5b49feede33981dfa53 0000-0002-5761-931X Tunyi Tunyi Abongeh Tunyi Tunyi Abongeh true false 2026-06-11 CBAE This paper investigates whether climate-related disclosure (CRD) affects the financial performance of conventional banks (CBs) and Islamic banks (IBs) differently. Using a unique hand-collected dataset on CRD for 591 banks (422 CBs and 169 IBs) from 24 countries over a four-year period, we examine how the relationship between CRD and financial performance varies across bank types. The results reveal a contrasting effect of CRD on the financial performance of the two bank types. Specifically, CBs experience a significant improvement in financial performance as the extent of their environmental and climate-related disclosures increases, whereas IBs exhibit a significantly negative relationship between CRD and financial performance. We attribute this disparity to CBs' comparative advantages, including greater market power, higher cost efficiency, and more flexible governance structures, which enable them to derive greater benefits from climate-related disclosure practices than IBs. This study contributes to the literature on non-financial disclosure and bank performance by highlighting the heterogeneous effects of CRD across banking models. The findings also have important policy implications for addressing climate change and advancing sustainable finance initiatives, particularly in the context of the Paris Agreement and COP26. More broadly, the study underscores the critical role of the banking sector in facilitating the transition to a more sustainable economy. Journal Article Business Strategy and the Environment Climate-related disclosure, Climate risk, Conventional banks, Islamic banks, bank performance 0 0 0 0001-01-01 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University Another institution paid the OA fee 2026-06-11T11:21:27.1088156 2026-06-11T11:18:48.0906055 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Rasim Simsek 1 Sabur Mollah 2 Tunyi Tunyi Abongeh 0000-0002-5761-931X 3
title Climate-Related Disclosure and Bank Performance: Does Bank Type Matter?
spellingShingle Climate-Related Disclosure and Bank Performance: Does Bank Type Matter?
Tunyi Tunyi Abongeh
title_short Climate-Related Disclosure and Bank Performance: Does Bank Type Matter?
title_full Climate-Related Disclosure and Bank Performance: Does Bank Type Matter?
title_fullStr Climate-Related Disclosure and Bank Performance: Does Bank Type Matter?
title_full_unstemmed Climate-Related Disclosure and Bank Performance: Does Bank Type Matter?
title_sort Climate-Related Disclosure and Bank Performance: Does Bank Type Matter?
author_id_str_mv eefe2792c8eed5b49feede33981dfa53
author_id_fullname_str_mv eefe2792c8eed5b49feede33981dfa53_***_Tunyi Tunyi Abongeh
author Tunyi Tunyi Abongeh
author2 Rasim Simsek
Sabur Mollah
Tunyi Tunyi Abongeh
format Journal article
container_title Business Strategy and the Environment
institution Swansea University
college_str Faculty of Humanities and Social Sciences
hierarchytype
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 0
active_str 0
description This paper investigates whether climate-related disclosure (CRD) affects the financial performance of conventional banks (CBs) and Islamic banks (IBs) differently. Using a unique hand-collected dataset on CRD for 591 banks (422 CBs and 169 IBs) from 24 countries over a four-year period, we examine how the relationship between CRD and financial performance varies across bank types. The results reveal a contrasting effect of CRD on the financial performance of the two bank types. Specifically, CBs experience a significant improvement in financial performance as the extent of their environmental and climate-related disclosures increases, whereas IBs exhibit a significantly negative relationship between CRD and financial performance. We attribute this disparity to CBs' comparative advantages, including greater market power, higher cost efficiency, and more flexible governance structures, which enable them to derive greater benefits from climate-related disclosure practices than IBs. This study contributes to the literature on non-financial disclosure and bank performance by highlighting the heterogeneous effects of CRD across banking models. The findings also have important policy implications for addressing climate change and advancing sustainable finance initiatives, particularly in the context of the Paris Agreement and COP26. More broadly, the study underscores the critical role of the banking sector in facilitating the transition to a more sustainable economy.
published_date 0001-01-01T06:02:58Z
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score 11.109323

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