Project description DEENESFRITPL Banks’ CSR impact on the environment Banks, in their role as development partners, have a big role to play in the transition to a sustainable economy. Banks’ corporate social responsibility (CSR) actions are considered a vehicle for achieving sustainable development of business and the economy. Also, in line with United Nations Environment Programme (UNEP) recommendations, the High-level Expert Group (HLEG) on sustainable finance (established by the European Commission) has argued to initiate a ‘climate-related financial disclosure’ on banks’ capital requirements. The EU-funded SUSBANK project will build on these by finding empirical support for the explicit acknowledgment of environmental risk as an emerging source of systemic risk. It will investigate the impact of environmental sustainability engagement of banks on their reputation, earnings quality, CEO compensation, long-term growth and, importantly, on systemic risk. Show the project objective Hide the project objective Objective The need for more socially and environmentally sustainable financial system has never been more crucial than it is at present. CSR is considered as a vehicle for achieving sustainable development of the business and the economy. Presently out of all CSR dimensions, climate and environmental issues have come out as the single prevalent negative externality. Since banks are the development partners of the rest of the economy, anti-environmental engagement could be harmful for bank reputation, earnings quality, and growth. Further, CEO compensation is strongly allied with excessive risk-taking in banks. Thus, as the banks are strongly interlinked, any adverse event could severely affect the banking system as a whole through spillover effects and thus increase the systemic risk. However, the Basel Committee on Banking Supervision has not yet addressed the environmental issues in its macroprudential regulatory framework. Nonetheless, in line with United Nations Environment Programme (UNEP) recommendations, the High-level Expert Group (HLEG) on sustainable finance (established by the European Commission) has argued to initiate a ‘climate-related financial disclosure’ or a ‘brown-penalising factor’ on banks’ capital requirements to address the environmental risk.To strengthen the UNEP and HLEG arguments, the proposed research aims to find empirical support for the explicit acknowledgment of environmental risk as an emerging source of systemic risk. The proposed research is expecting to contribute in several ways. Firstly, to our knowledge, this is the first effort to investigate the impact of environmental sustainability engagement of banks on their reputation, earnings quality, CEO compensation, long-term growth, and importantly on systemic risk. Secondly, the position of EU banks will be compared with other regional banks on the related issues. Thus, the findings will provide significant insights for the policymakers to set a common environmental regulatory benchmark. Fields of science natural sciencesearth and related environmental sciencesenvironmental sciencessustainability sciencessocial scienceseconomics and businesseconomicssustainable economy Keywords Banking system Environmental disclosure Sustainability Reputation Earnings quality Growth Systemic risk Regulation Programme(s) H2020-EU.1.3. - EXCELLENT SCIENCE - Marie Skłodowska-Curie Actions Main Programme H2020-EU.1.3.2. - Nurturing excellence by means of cross-border and cross-sector mobility Topic(s) MSCA-IF-2019 - Individual Fellowships Call for proposal H2020-MSCA-IF-2019 See other projects for this call Funding Scheme MSCA-IF - Marie Skłodowska-Curie Individual Fellowships (IF) Coordinator BANGOR UNIVERSITY Net EU contribution € 224 933,76 Address COLLEGE ROAD LL57 2DG Bangor United Kingdom See on map Region Wales West Wales and The Valleys Gwynedd Activity type Higher or Secondary Education Establishments Links Contact the organisation Opens in new window Website Opens in new window Participation in EU R&I programmes Opens in new window HORIZON collaboration network Opens in new window Total cost € 224 933,76
