 The extreme event of climate change: How digital transformation affects the performance of commercial banks?Wujun Sun, Yujia Zhai, Ruihai Li and Xuewu Wang Energy Economics, 2025, vol. 150, issue C Abstract: This paper investigates how digital transformation moderates the adverse impact of climate risks on commercial bank performance, using a panel dataset of 187 Chinese commercial banks from 2012 to 2021. The results reveal that heightened climate risks significantly reduce bank profitability and operational stability. However, digital transformation offsets these deleterious effects by lowering cost-to-income ratios and enhancing operational efficiency. A variety of robustness tests confirm the validity of the findings. Further heterogeneity analyses indicate that the mitigating role of digital transformation is more pronounced in developed regions and smaller banks. By explicitly linking climate risk and digital strategies, this study contributes to the growing literature on sustainable finance and risk management. The findings offer timely insights for policymakers and bank executives seeking to fortify financial institutions against climate disruptions, while highlighting the strategic value of digital investments for long-term resilience. Keywords: Climate risk; Commercial banks; Business performance; Digital transformation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:150:y:2025:i:c:s0140988325006103 DOI: 10.1016/j.eneco.2025.108783 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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