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Do bank incentives matter? Evidence from the impact of green finance on corporate carbon neutrality performance

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  • Wu, Hao
  • Song, Yunling

Abstract

Bank incentives are pivotal to enterprises’ low-carbon transitions. Utilizing the 2021 China green finance evaluation as an exogenous shock to bank incentives, we show that increasing such incentives can significantly enhance the carbon neutrality performance of heavily polluting enterprises. Additionally, factors based on financing perspective and stakeholders’ attention moderate that relationship. The impact of bank incentives solely extends to the environmental dimension of ESG. Our results provide insights and policy implications for stakeholders and policymakers in promoting the impact of green finance.

Suggested Citation

  • Wu, Hao & Song, Yunling, 2025. "Do bank incentives matter? Evidence from the impact of green finance on corporate carbon neutrality performance," Finance Research Letters, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324014880
    DOI: 10.1016/j.frl.2024.106459
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    References listed on IDEAS

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    2. Zheng, Yulan & Chen, Yu & Shen, Aolong, 2025. "Green finance as a catalyst: Driving embodied carbon efficiency in infrastructure development," Finance Research Letters, Elsevier, vol. 86(PF).
    3. Giedrė Lapinskienė & Tadas Gudaitis & Rita Martišienė, 2025. "Green Loans: Expert Perspectives," JRFM, MDPI, vol. 18(4), pages 1-17, April.
    4. Liu, Maotao & Fang, Xubing, 2025. "How does green investor entry affect corporate carbon performance? Evidence from China," Renewable Energy, Elsevier, vol. 244(C).
    5. Liu, Xiuli & Cui, Jing & Chang, Yukun & Bai, Chunguang & Yue, Xiaohang & Shen, Jun & Shi, Qinqin, 2026. "Facilitating net-zero emissions goals through green finance: Enhancing efficiency in corporate green innovation within a two-stage value chain framework," International Journal of Production Economics, Elsevier, vol. 292(C).

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