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Eco-Banking in Relation to Financial Performance of the Sector—The Evidence from Poland

Author

Listed:
  • Justyna Zabawa

    (Department of Banking, Wroclaw University of Economics and Business, 53-345 Wrocław, Poland)

  • Cyprian Kozyra

    (Department of Statistics, Wroclaw University of Economics and Business, 53-345 Wrocław, Poland)

Abstract

With the advent of corporate social responsibility, practical aspects of environmental responsibility have gained importance and recognition among both manufacturing and service enterprises, including financial services. This trend is also evidenced extensively in the literature. On the other hand, the literature reveals a significant gap in the research into the matter of environmental responsibility of banks in the light of their financial effectiveness. In addition, the European Union (EU) regulations require banking entities to provide reports of any activities related to protection of natural resources. Two important dilemmas arise in this context—how to measure the environmental involvement of the banking sector and how to relate this type of involvement to the sector’s financial effectiveness? We applied Analytic Hierarchy Process (AHP), linear ordering methods—standardized sum method and synthetic measure of development, Pearson’s and Spearman’s correlation coefficients, Student’s t and Mann-Whitney U tests and boxplots to measure environmental responsibility of banks and to examine the empirical relationship between environmental engagement and bank financial performance data. We also used analytical methods for the study of financial and non-financial reports of banks. We posited three research hypotheses related to measurement of environmental involvement of banks (ecologization) and to correlations between the sector’s financial effectiveness and its environmental involvement. The study does not confirm any direct influence of banks’ financial results upon the scale of their environmental involvement. Based on the above, the we also made an attempt at explaining the results and identifying directions of further research into the subject.

Suggested Citation

  • Justyna Zabawa & Cyprian Kozyra, 2020. "Eco-Banking in Relation to Financial Performance of the Sector—The Evidence from Poland," Sustainability, MDPI, vol. 12(6), pages 1-23, March.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:6:p:2162-:d:331277
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    References listed on IDEAS

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    1. Justyna Fijałkowska & Beata Zyznarska-Dworczak & Przemysław Garsztka, 2018. "Corporate Social-Environmental Performance versus Financial Performance of Banks in Central and Eastern European Countries," Sustainability, MDPI, vol. 10(3), pages 1-22, March.
    2. Adriana Schiopoiu Burlea, 2019. "The Impact of Triple Bottom Dispersal of Actions on Integrated Reporting: A Critical Perspective," CSR, Sustainability, Ethics & Governance, in: Samuel O. Idowu & Mara Del Baldo (ed.), Integrated Reporting, chapter 0, pages 141-152, Springer.
    3. Cynthia GIAGNOCAVO & Silvia GEREZ & Jacopo SFORZI, 2012. "Cooperative Bank Strategies For Social-Economic Problem Solving: Supporting Social Enterprise And Local Development," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 83(3), pages 281-315, September.
    4. Jun Huang & Zhixin Duan & Guowei Zhu, 2017. "Does Corporate Social Responsibility Affect the Cost of Bank Loans? Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 53(7), pages 1589-1602, July.
    5. Maria-Gaia Soana, 2011. "The Relationship Between Corporate Social Performance and Corporate Financial Performance in the Banking Sector," Journal of Business Ethics, Springer, vol. 104(1), pages 133-148, November.
    6. Justyna Zabawa, 2018. "Design of Innovative Research Procedure Concerning Environmental Responsibility of Banks and Their Financial Effectiveness in the Context of Implementation of the Directive 2014/95/EU," Springer Proceedings in Business and Economics, in: Agnieszka Bem & Karolina Daszyńska-Żygadło & Taťána Hajdíková & Péter Juhász (ed.), Finance and Sustainability, pages 273-284, Springer.
    7. Youyi Fong & Ying Huang, 2019. "Modified Wilcoxon–Mann–Whitney Test and Power Against Strong Null," The American Statistician, Taylor & Francis Journals, vol. 73(1), pages 43-49, January.
    8. Tomasz Murawski, 2016. "Corporate Social Responsibility In Japanese Banking Sector," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 5(2), pages 149-161.
    9. De Haas, Ralph & Popov, Alexander, 2019. "Finance and decarbonisation: why equity markets do it better," Research Bulletin, European Central Bank, vol. 64.
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    Cited by:

    1. Karolina Daszyńska-Żygadło & Krzysztof Jajuga & Justyna Zabawa, 2021. "Bank as a Stakeholder in the Financing of Renewable Energy Sources. Recommendations and Policy Implications for Poland," Energies, MDPI, vol. 14(19), pages 1-22, October.
    2. Damian Walczak & Leszek Dziawgo & Danuta Dziawgo & Michał Buszko & Jarosław Pawłowski & Agnieszka Żołądkiewicz-Kuzioła & Dorota Krupa, 2021. "Attitudes and Behaviors Regarding Environmental Protection in the Financial Decisions of Individual Consumers," Energies, MDPI, vol. 14(7), pages 1-13, March.

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