Climate risk, ESG performance, and ESG sentiment in US commercial banks

We measure US commercial banks' exposure to and materiality of physical climate risk by examining branch-level data. Our location-specific climate risk measure is pos- itively associated with banks' ESG performance and negatively associated with stake- holders' sentiment regarding ESG...

Full description

Saved in:
Bibliographic Details
Published inGlobal finance journal Vol. 59; p. 100924
Main Authors Erhemjamts, Otgontsetseg, Huang, Kershen, Tehranian, Hassan
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.03.2024
Subjects
And ESG sentiment
Climate risk
Commercial banks
ESG performance
ESG performance
G11
G21
G12
Climate risk
G14
Commercial banks
And ESG sentiment
Online AccessGet full text

Cover

More Information
Summary:We measure US commercial banks' exposure to and materiality of physical climate risk by examining branch-level data. Our location-specific climate risk measure is pos- itively associated with banks' ESG performance and negatively associated with stake- holders' sentiment regarding ESG issues. Furthermore, banks that experience climate risk shocks, as proxied by NOAA billion-dollar disasters, improve ESG performance and receive positive ESG sentiment accordingly compared with matched banks. While negative sentiment due to climate risk exposure is associated with worsened financial performance, stronger ESG engagement mitigates this adverse effect.
ISSN:1044-0283
1873-5665
DOI:10.1016/j.gfj.2023.100924