Do bank-enterprise ESG disparities affect corporate ESG performance?1

Jin Zou, Nanli Cheng, Li Gao, Chi Gong and Xiaoye Lu

Finance Research Letters, 2025, vol. 72, issue C

Abstract: This study investigates the impact of bank-enterprise ESG performance disparities on corporate ESG performance using China's A-share listed banks and their corporate clients' ESG rating data from 2016 to 2022. The lending relationship between banks and enterprises significantly promotes corporate ESG performance improvement, especially when the ESG performance gap is substantial. Banks can further incentivize enterprises by adjusting loan terms and amounts. However, ESG rating divergences may weaken this effect. Banks exhibit dimensional heterogeneity in their attention to borrowing enterprises' ESG performance, emphasizing social responsibility and governance over environmental performance, although the latter is gradually gaining importance.

Keywords: ESG ratings; Bank-enterprise relationship; ESG performance disparities (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324016003

DOI: 10.1016/j.frl.2024.106571

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