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Some Don't Like It Hot: Bank Depositors and NGO Campaigns Against Brown Banks

Author

Listed:
  • Clément Mazet-Sonilhac

    (Bocconi University [Milan, Italy])

  • Jean-Stéphane Mésonnier

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, Centre de recherche de la Banque de France - Banque de France)

Abstract

We study whether households respond to claims that their bank finances global warming. We leverage new data on NGO campaigns targeting financial institutions involved in climate-damaging, so-called "brown", projects to measure the "brown" reputation of French banks. Using granular data on household deposit holdings in France from 2010 to 2020, we find that the worsened environmental reputation of a bank leads to a lower demand for its deposits. To interpret this as evidence that environmentally motivated customers leave brown banks, we exploit a 2017 regulatory reform that eliminated barriers to switching bank accounts. The relationship between deposit volumes and banks' brown reputation strengthens markedly after the reform, suggesting that reduced frictions allowed households to act on their environmental preferences and change for greener banks.

Suggested Citation

  • Clément Mazet-Sonilhac & Jean-Stéphane Mésonnier, 2025. "Some Don't Like It Hot: Bank Depositors and NGO Campaigns Against Brown Banks," Working Papers hal-04350378, HAL.
    • Handle: RePEc:hal:wpaper:hal-04350378
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-04350378v3
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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