Some Don't Like it Hot: Bank Depositors and NGO Campaigns Against Brown Banks

Abstract

We exploit new data on NGO campaigns that target banks financing fossil fuels (``brown'' banks) to build a measure of French banks' environmental reputation, which we merge with granular data on bank deposits and loans of households in France over 2010-2020. We find that banks receive relatively fewer household deposits when they are perceived as browner. Depositors mostly react to their bank's brown reputation after the implementation of a new regulation that cuts down the transaction costs of changing banks. Last, using a large database of new mortgage loans, we show that browner banks also face a relatively lower demand for housing loans, implying lower mortgage loan rates offered to their customers.

Keywords: Climate change, Households Finance, Brown Banks, Green Preferences

JEL Classification: G21, G51, Q54