Corporate Social Responsibility and Bank Risk

38 Pages Posted: 1 Oct 2019 Last revised: 4 Mar 2020

See all articles by Florian Neitzert

Florian Neitzert

University of Cologne - Faculty of Management, Economics and Social Sciences

Matthias Petras

University of Cologne - Department of Banking; University of Cologne; University of Cologne - Faculty of Management, Economics and Social Sciences

Date Written: September 19, 2019

Abstract

In light of climate change, the concept of sustainable banking has recently experienced significant development. Extant literature on sustainability finds that corporate social responsibility reduces idiosyncratic firm risk. However, it remains unclear whether the risk-reduction stems from the environmental, social, or governance pillar. We investigate the origins and effect drivers, by analysing a sample of 2,452 banks from 115 countries over the period from 2002 to 2018. As a result, we identify the environmental pillar and its sub-components as the significant determinants.

Keywords: Bank Risk, Default Risk, Portfolio Risk, Sustainability Risk, CSR, ESG

JEL Classification: G21; G32; M14; Q56

Suggested Citation

Neitzert, Florian and Petras, Matthias, Corporate Social Responsibility and Bank Risk (September 19, 2019). Available at SSRN: https://ssrn.com/abstract=3456754 or http://dx.doi.org/10.2139/ssrn.3456754

Florian Neitzert

University of Cologne - Faculty of Management, Economics and Social Sciences ( email )

Albertus Magnus Platz
Cologne, DE NRW 50923
Germany

Matthias Petras (Contact Author)

University of Cologne - Department of Banking ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

HOME PAGE: http://www.bankseminar.uni-koeln.de/en/seminar/staff/staff/petras/

University of Cologne ( email )

Albertus Magnus Platz
Cologne, NRW 50923
Germany

University of Cologne - Faculty of Management, Economics and Social Sciences ( email )

Richard-Strauss-Str. 2
Cologne, D-50923
Germany

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