ESG issues in emerging markets and the role of banks

Thankom Arun, Claudia Girardone and Stefano PiserÃ

Chapter 17 in Handbook of Banking and Finance in Emerging Markets, 2022, pp 321-344 from Edward Elgar Publishing

Abstract: We explore the most relevant forces impacting the shift towards more ESG-related strategies in emerging markets. We focus on banks' role in BRICS countries that are the biggest and fastest growing emerging markets economies over 2009-2020. We also discuss how the ESG agenda has been pushed by the United Nations (UN) and by regulators. Our evidence shows that banks' specific adoption of international sustainability frameworks and agreements such as the Global Reporting Initiative (GRI) are significant drivers of ESG engagement. Moreover, we find that a stronger ESG regulatory approach enhances banks' sustainability practices in BRICS countries, especially for those that have lower average ESG scores. Two main implications can be drawn from our study: (i) banks should be encouraged to adopt international frameworks which provide universal minimum standards for corporate responsibility; and (ii) to improve the overall ESG information environment, mandatory disclosure rules should be introduced at country level.

Keywords: Development Studies; Economics and Finance (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Working Paper: ESG issues in emerging markets and the role of banks (2021)
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