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Assessing the influence of ESG washing on bank reputational exposure: A cross‐country analysis

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  • Valeria Venturelli
  • Alessia Pedrazzoli
  • Daniela Pennetta
  • Gennaro De Novellis

Abstract

The study investigates the effects of ESG washing on banks' reputational exposure. We define ESG washing as a disparity between a bank's environmental and social disclosure level and the practical implementation of the relative measures. The analysis involves an international sample of 120 banks operating across 35 countries from 2014 to 2020. The results evidence a different effect based on the pillar considered: the higher the inconsistency on environmental issues, the higher a bank's reputational exposure. Conversely, higher levels of disclosure compared to performance on social issues appear to reduce reputational exposure. In addition, citizen movements and the country's legal system play a significant role in amplifying or mitigating a bank's reputational exposure. Our findings offer insight into the phenomenon of ESG washing in the banking industry, supporting the need for more verified information across countries and all economic sectors.

Suggested Citation

  • Valeria Venturelli & Alessia Pedrazzoli & Daniela Pennetta & Gennaro De Novellis, 2025. "Assessing the influence of ESG washing on bank reputational exposure: A cross‐country analysis," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 34(4), pages 1540-1560, October.
    • Handle: RePEc:wly:buseth:v:34:y:2025:i:4:p:1540-1560
    DOI: 10.1111/beer.12727
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