Risks and the Cost of Bank Debt: What We Know and What We Don’t Know

Concetta Carnevale and Danilo Drago

Banca Impresa Società, 2023, issue 2, 235-276

Abstract: Banks can exert considerable economic influence on corporate commitment in CSR and provide valuable support for the sustainability agendas of governments and institutions. We present a review of the existing literature investigating whether banks adjust interest rates and other loan contract features to account for the ESG performance (or risk) of their borrowers. The studies reviewed provide several conflicting results. Furthermore, these studies are mostly focused on large listed companies, while the universe of small and medium-sized companies is almost completely neglected. We highlight several research gaps and outline some insights for future research.

Keywords: Environmental, Social, Governance (ESG) Performance and Risks; Corporate Social Responsibility (CSR); Bank Loans; Sustainable Economy; Literature Review. (search for similar items in EconPapers)
Date: 2023
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