TY - JOUR
T1 - Climate risk, ESG performance, and ESG sentiment in US commercial banks
AU - Erhemjamts, Otgontsetseg
AU - Huang, Kershen
AU - Tehranian, Hassan
N1 - Publisher Copyright:
© 2023
PY - 2024/3
Y1 - 2024/3
N2 - We measure US commercial banks' exposure to and materiality of physical climate risk by examining branch-level data. Our location-specific climate risk measure is pos- itively associated with banks' ESG performance and negatively associated with stake- holders' sentiment regarding ESG issues. Furthermore, banks that experience climate risk shocks, as proxied by NOAA billion-dollar disasters, improve ESG performance and receive positive ESG sentiment accordingly compared with matched banks. While negative sentiment due to climate risk exposure is associated with worsened financial performance, stronger ESG engagement mitigates this adverse effect.
AB - We measure US commercial banks' exposure to and materiality of physical climate risk by examining branch-level data. Our location-specific climate risk measure is pos- itively associated with banks' ESG performance and negatively associated with stake- holders' sentiment regarding ESG issues. Furthermore, banks that experience climate risk shocks, as proxied by NOAA billion-dollar disasters, improve ESG performance and receive positive ESG sentiment accordingly compared with matched banks. While negative sentiment due to climate risk exposure is associated with worsened financial performance, stronger ESG engagement mitigates this adverse effect.
KW - And ESG sentiment
KW - Climate risk
KW - Commercial banks
KW - ESG performance
UR - http://www.scopus.com/inward/record.url?scp=85181235198&partnerID=8YFLogxK
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U2 - 10.1016/j.gfj.2023.100924
DO - 10.1016/j.gfj.2023.100924
M3 - Article
AN - SCOPUS:85181235198
SN - 1044-0283
VL - 59
JO - Global Finance Journal
JF - Global Finance Journal
M1 - 100924
ER -