 Environmental performance and credit ratings: A transatlantic studyHaoshen Hu, Emese Lazar, Jingqi Pan and Shixuan Wang International Review of Financial Analysis, 2024, vol. 96, issue PB Abstract: This paper investigates the impact of the firms’ environmental performance on their credit rating. To this end, we conduct a transatlantic study covering companies in the United States (US) and in the European Union (EU). Our study reveals that firms’ environmental improvements positively contribute to their credit ratings. However, this effect varies between the US and the EU. If US and European firms enhance their environmental performance by the same scale, the former’s creditworthiness benefits more than the latter’s. Additionally, we show that improvements in environmental performance affect credit ratings linearly in the US but nonlinearly in the EU. These findings shed light on the implications of the firms’ environmental performance and provide critical insights into the impact of corporate sustainability indicators on credit ratings. Keywords: Credit ratings; Climate risk; Environmental performance; Transatlantic study (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:finana:v:96:y:2024:i:pb:s1057521924005672 DOI: 10.1016/j.irfa.2024.103635 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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