Climate-related disclosure commitment of the lenders, credit rationing, and borrower environmental performance
Using lenders becoming members of the Task Force on Climate-Related Financial Disclosures (TCFD) as a plausible exogeneous shock, we examine whether and how lenders' commitment to transparent climate-related disclosures affects borrower firms' environmental performance. We find that client firms of TCFD-member lenders, relative to control firms, significantly improve their environmental performance after the TCFD launch. The effects are stronger for polluting firms. Moreover, TCFD-member lenders influence their borrowers' environmental performance via charging higher loan spread and reducing the number and amount of new loans issued to polluting firms. Finally, polluting clients of TCFD-member lenders experience tightened financial constraints subsequently.
Year of publication: |
2023
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Authors: | Hasan, Iftekhar ; Lee, Haekwon ; Qiu, Buhui ; Saunders, Anthony |
Publisher: |
Helsinki : Bank of Finland |
Subject: | Climate-related Disclosure Commitment | Credit Rationing | Borrower Environmental Performance |
Saved in:
freely available
Series: | |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
ISBN: | 978-952-323-436-9 |
Other identifiers: | 1843515792 [GVK] hdl:10419/271050 [Handle] RePEc:zbw:bofrdp:72023 [RePEc] |
Classification: | G21 - Banks; Other Depository Institutions; Mortgages ; G30 - Corporate Finance and Governance. General ; Q54 - Climate; Natural Disasters |
Source: |
Persistent link: https://www.econbiz.de/10014282655