IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v150y2025ics0140988325006103.html
   My bibliography  Save this article

The extreme event of climate change: How digital transformation affects the performance of commercial banks?

Author

Listed:
  • Sun, Wujun
  • Zhai, Yujia
  • Li, Ruihai
  • Wang, Xuewu

Abstract

This paper investigates how digital transformation moderates the adverse impact of climate risks on commercial bank performance, using a panel dataset of 187 Chinese commercial banks from 2012 to 2021. The results reveal that heightened climate risks significantly reduce bank profitability and operational stability. However, digital transformation offsets these deleterious effects by lowering cost-to-income ratios and enhancing operational efficiency. A variety of robustness tests confirm the validity of the findings. Further heterogeneity analyses indicate that the mitigating role of digital transformation is more pronounced in developed regions and smaller banks. By explicitly linking climate risk and digital strategies, this study contributes to the growing literature on sustainable finance and risk management. The findings offer timely insights for policymakers and bank executives seeking to fortify financial institutions against climate disruptions, while highlighting the strategic value of digital investments for long-term resilience.

Suggested Citation

  • Sun, Wujun & Zhai, Yujia & Li, Ruihai & Wang, Xuewu, 2025. "The extreme event of climate change: How digital transformation affects the performance of commercial banks?," Energy Economics, Elsevier, vol. 150(C).
    • Handle: RePEc:eee:eneeco:v:150:y:2025:i:c:s0140988325006103
    DOI: 10.1016/j.eneco.2025.108783
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988325006103
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2025.108783?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:150:y:2025:i:c:s0140988325006103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.