Sustainable Finance and ESG: Risk, Management, Regulations, and Implications for Financial Institutions

Preface
Contents
Notes on Contributors
List of Figures
List of Tables
The Changing Role of Banks in the Financial System: Social Versus Conventional Banks
	1 Introduction
	2 Social Banks in the Field
	3 Empirical Studies on Social Banks
		Target Clientele
		Matching the Two Sides: Overcoming Information Asymmetry
		Transparency and Simple Intermediation
		Stakeholder Involvement
	4 Theorizing the Business Model of Social Banks
		Supply Side: Socially Minded Funders
		Demand Side: Prosocial Borrowers
		A Global Perspective on Social Banking
	5 Conclusion
	References
ESG Issues as Strategic Components of Long-term Success of Financial Institutions: Are There Differences in Financial Performance and Firm Value?
	1 Introduction
	2 Historical Overview
		Assessment of ESG Risks in Lending
		ESG-Related Investment
		Banks and Climate Risks
	3 ESG Criteria in Commercial Lending—Financial Aspects
		Theoretical Background
	4 ESG Integration in Financial Products and Services
		ESG Investing
		Impact Investing
		Fossil Fuel Divestment and Engagement
		Green Lending
		ESG-Related Credit Risk Assessment
		Green Bonds
	5 Conclusion
	References
Corporate Social Responsibility, Customer Satisfaction, and Customer Loyalty in Banking Institutions: A Literature Review
	1 Introduction
	2 Corporate Social Responsibility (CSR)
	3 Customer Satisfaction
	4 Customer Loyalty
	5 Corporate Social Responsibility, Customer Satisfaction, and Customer Loyalty in the Banking Sector
	6 CSR and Mutual Funds
	7 Discussion
	8 Conclusion and Future Research
	References
Socially and Environmentally Responsible Investments and Mutual Funds
	1 Introduction
	2 Socially Responsible Investing
	3 From SRI to ESG
	4 ESG Criteria for SRI
		Environment
		Society
		Corporate Governance
	5 Literature Review on Social and Environmental Mutual Funds
		Characteristics of Socially Responsible Mutual Funds
		Behavioral Issues
		The Performance of SR Mutual Funds
		Portfolio Optimization for SR Mutual Funds
	6 Concluding Remarks
	References
Firm ESG Practices and the Terms of Bank Lending
	1 Introduction
	2 What Motivates Banks to Consider ESG as a Relevant Issue?
		ESG and Credit Risk
		ESG and Bank Value Relevance
	3 What and How ESG Factors Affect Bank Lending Terms
		Environmental factors and bank loans
		Social Factors and Bank Loans
		Governance Factors and Bank Loans
	4 What are the Real Consequences of ESG Lending?
	5 New Empirical Evidence on the Impact of ESG from the Bank Perspective
		The Value Relevance of ESG Risks for Banks
		Banks’ ESG and lending relationships
	6 Conclusions
	Appendix 1: List of Published and Working Papers in ESG and Cost of Bank Loan
	Appendix 2: Variable Definitions
	References
ESG and Credit Risk
	1 Introduction
	2 ESG and Credit Risk: Academic Evidence
	3 ESG and Rating Agencies
		The Case of Standard & Poor’s (S&P)
		The Case of Fitch
		The Case of Moody’s
	4 Conclusions
	References
The Politics of Climate Finance and Policy Initiatives to Promote Sustainable Finance and Address ESG Issues
	1 Introduction
	2 Background
	3 Method and Research Approach
	4 Analysis
		International Initiatives
		National Actions
			Disclosure Requirements
			Green Taxonomies
			Sustainable Finance Regulations in Financial Institutions
			Overview of the Survey Results
	5 Discussion
		Toward Mandatory and Internationally Harmonized Disclosure Requirements
		Lack of Data to Understand Climate Risks and Growing Greenwashing Concerns
		Climate-Aligned Financial Measures to Promote Green Finance
		Green Bonds and the Development of Green Financial Markets
	6 Conclusions
	References
The Role of Bank Regulators in the Promotion of Green and Climate Finance
	1 Introduction
	2 Climate Risks: Why Do They Matter for Financial Stability and Monetary Policy?
	3 Climate Change and Financial Supervision and Regulation
		Scaling up Green Finance
		Taming Climate-Related Financial Instability
			Adoption of Climate-Related Financial Policies
			Drivers of Diffusion of Climate-Related Financial Policies
			Waves of Adoption of Climate-Related Financial Policies
	4 Challenges and Shortcomings of Existing Prudential Frameworks
		Assessing the Current Micro-Prudential Framework
		Assessing the Current Macro-Prudential Framework
	5 Climate Change and the Conduct of Monetary Policy
	6 Future Research and Policy Directions
	References
Index