Climate Change Strategic Actions in the International Banking Industry

Abstract

This article investigates the actions of international banks related to climate change adaptation. A theoretical framework was developed to assess bank climate change strategic actions based on five categories: management commitment, emissions reduction, product development, organizational involvement and external relationship development. A sample of international banks from 15 countries in four regions was analysed. Significant differences were found in the level of climate change strategic actions by banks across regions. North American banks had the highest scores on management commitment and product development. Australian banks were the top performers in external relationship development. European banks were ranked first in emissions reduction. Asian banks received the lowest score in all the categories of climate change strategic actions. The research is a unique comparative exploratory study of the strategic actions taken to address climate change in the international banking industry. The theoretical contribution of this article is its link between the theory of organizational adaptation and the climate change actions that banks practice. The research is beneficial for bank executives to develop effective environmental actions that will increase climate change mitigation and adaptation globally but particularly in Asia, which is the critical region for climate change actions.

Determinants of climate change disclosures in the Turkish banking industry

“…To illustrate, they can offer attractive financing to companies that reduce GHG emissions in their business practices (Furrer et al , 2012). They can also offer specialized financial products, including carbon and climate loans, green investment products and special advisory services to inform consumers about these adaptations and the resulting mitigation of climate change (Buranatrakul and Swierczek, 2017).…”

“…For instance, they can significantly contribute to sustainable development by facilitating green financial products aimed at the reduction of energy consumption and carbon emissions (Scholtens, 2009). The World Business Council for Sustainable Development has identified the financial industry as being a critical sector in providing environmental sustainability (Buranatrakul and Swierczek, 2017). However, prior academic studies have generally excluded financial institutions from their research samples or did not maintain a focus on the possibility of their climate change-related reporting practices.…”

“…Third, our study extends the current literature because academic research dealing with the extent of climate change disclosures by banks is limited. To date, surprisingly, few studies have been undertaken which explore the driving factors created by disclosures centering on a specific environmental issue, namely, climate change, within the banking industry (Furrer et al , 2012; Buranatrakul and Swierczek, 2017). Further, to the best knowledge of the authors, this is the first study examining climate change-related reporting practices in the Turkish banking industry.…”

Environmental Factors and Bank Performance: How Financial Market Role Players React in Malaysia?

“…Environmental factors and banking industry are closely associated to each other where we have found a vast literature as contributed by (Alisjahbana and Busch, 2017;Bose et al, 2018;Buranatrakul and Swierczek, 2018;ElAlfy and Weber, 2019;Garg, 2015;Javeria et al, 2019;Kılıç and Kuzey, 2019;Lalon, 2015;Roy et al, 2015). One of the key contribution is provided by (Kılıç and Kuzey, 2019) who have analyzed the climate change determinants and its disclosure in the banking industry of Turkey.…”

“…Study contribution is observed with the extension provided to existing literature while concentrating on environmental issues. Buranatrakul and Swierczek (2018) investigates the action of various international banking firms as associated with the climate change and its adoption. For better understanding, authors have provided a theoretical framework while assessing the climate change related strategies as provided by the bank through commitment of the management, reduction of emission, development of product, organizational involvement, and finally the outside relationship by the business.…”