Determinants of Global Banks’ Climate Information Disclosure with the Moderating Effect of Shareholder Litigation Risk

Ahseon Lee, Jong Dae Kim and Seong Mi Bae ()
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Ahseon Lee: Green Finance Graduate Program, Inha University, Incheon 22212, Republic of Korea
Jong Dae Kim: College of Business Administration, Inha University, Incheon 22212, Republic of Korea
Seong Mi Bae: College of Business Administration, Inha University, Incheon 22212, Republic of Korea

Sustainability, 2024, vol. 16, issue 6, 1-30

Abstract: This paper explores the influence of a country’s institutional factors and internal corporate governance on banks’ voluntary climate finance disclosures. The analysis focuses on the world’s top 100 banks, examining the institutional and governance factors that shape TCFD disclosure practices. From an institutional perspective, the research reveals a heightened level of climate financial disclosure in banks located in countries where investor protection is strong under the common law system and environmental performance is commendable. On the internal governance front, it is observed that the independence and diversity of the board of directors play a facilitating role in promoting such disclosure. Additionally, in countries where shareholder litigation is easily pursued, a moderating effect is observed wherein board independence paradoxically inhibits TCFD disclosure. This study stands as the first to explore the determinants of climate financial disclosure in global banks, confirming the driving forces behind such disclosures through institutional and stakeholder theories and providing crucial empirical evidence to enhance research on voluntary disclosure.

Keywords: bank; climate financial disclosure; TCFD; institutional theory; stakeholder theory; governance; shareholder litigation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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