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The Determinants of ESG Rating in the Financial Industry: The Same Old Story or a Different Tale?

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  • Fabrizio Crespi

    (Department of Economics and Business, Università di Cagliari, Via Sant’Ignazio, 17, 09123 Cagliari, Italy)

  • Milena Migliavacca

    (Department of Economics and Business Administration, Università Cattolica del Sacro Cuore, Largo A. Gemelli, 1, 20123 Milano, Italy)

Abstract

Corporate social performance (CSP) and, in particular, environmental, social and governance (ESG) ratings became a focal point for scholars, practitioners and policy makers over the last decade. In order to better understand the dynamics underlying CSP within the financial industry, we investigate its determinants. Adding to the debate regarding CSP antecedents, we draw on a world-wide sample of 727 financial firms operating in twenty-two countries within the period 2006–2017 and look for firm, country and temporal factors that affect CSP. The main results of our empirical analyses provide evidence that financial firms’ ESG scores are growing on a linear trend over time, and such tendency is enhanced by their size and profitability, together with the economic and social development of the country within which they operate. Our findings also show that the environmental, social and governance pillars follow independent patterns.

Suggested Citation

  • Fabrizio Crespi & Milena Migliavacca, 2020. "The Determinants of ESG Rating in the Financial Industry: The Same Old Story or a Different Tale?," Sustainability, MDPI, vol. 12(16), pages 1-20, August.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:16:p:6398-:d:396416
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    References listed on IDEAS

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    7. Paola Fandella & Bruno S. Sergi & Emiliano Sironi, 2023. "Corporate social responsibility performance and the cost of capital in BRICS countries. The problem of selectivity using environmental, social and governance scores," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1712-1722, July.
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