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Do bank-enterprise ESG disparities affect corporate ESG performance?1

Author

Listed:
  • Zou, Jin
  • Cheng, Nanli
  • Gao, Li
  • Gong, Chi
  • Lu, Xiaoye

Abstract

This study investigates the impact of bank-enterprise ESG performance disparities on corporate ESG performance using China's A-share listed banks and their corporate clients' ESG rating data from 2016 to 2022. The lending relationship between banks and enterprises significantly promotes corporate ESG performance improvement, especially when the ESG performance gap is substantial. Banks can further incentivize enterprises by adjusting loan terms and amounts. However, ESG rating divergences may weaken this effect. Banks exhibit dimensional heterogeneity in their attention to borrowing enterprises' ESG performance, emphasizing social responsibility and governance over environmental performance, although the latter is gradually gaining importance.

Suggested Citation

  • Zou, Jin & Cheng, Nanli & Gao, Li & Gong, Chi & Lu, Xiaoye, 2025. "Do bank-enterprise ESG disparities affect corporate ESG performance?1," Finance Research Letters, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324016003
    DOI: 10.1016/j.frl.2024.106571
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