Corporate Social Responsibility and Credit Ratings

Attig, Najah; Ghoul, Sadok El; Guedhami, Omrane; Suh, Jungwon

doi:10.1007/s10551-013-1714-2

Cited by 580 publications

(440 citation statements)

References 55 publications

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“…The study of Grunert et al (2005) is one of the first works that demonstrates how the combination of financial and non-financial factors leads to more accuracy in the prediction of a default event. Some authors develop this stream of research by particularly investigating the influence of these CSR and socially responsible initiatives on the credit risk portfolio of banks (Attig et al, 2013;Grunert et al, 2005;Weber, Diaz, & Schwegler, 2014;Weber, Scholz, & Michalik, 2010). Weber et al (2010) analyze which role sustainability and environmental practices play within the banks' credit risk management process.…”

Section: The Impact Of Esg On Financial Decision-makingmentioning

confidence: 99%

“…Despite the increasing interest in this issue, the effect of environmental, social, and governance issues on overall firm risk by jointly considering debt financing still remains an open, entangling debate (Albuquerque, Durnev, & Koskinen, 2014;Lee & Faff, 2009). From a financial perspective, scholars and practitioners call for the need to integrate ESG objectives into credit scoring evaluations and lending policies adopted by financial intermediaries (Attig, El Ghoul, & Guedhami, 2013;Birindelli, Ferretti, Intonti, & Iannuzzi, 2015;Zeidan, Boechat, & Fleury, 2015). As a matter of fact, ESG objectives do not clearly figure in the creditworthiness evaluation of credit lending practices employed by banks yet (Zeidan et al, 2015), even if financial markets and institutions have demonstrated an increasing interest in ESG criteria within investment decision-making processes (Friede et.…”

Section: Introductionmentioning

confidence: 99%

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The Linkage between ESG Performance and Credit Ratings: A Firm-Level Perspective Analysis

Devalle¹,

Fiandrino²,

Cantino³

2017

IJBM

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This paper investigates the effect of environmental, social, and governance (ESG) performance on credit ratings. We argue that ESG factors should be considered in the credit analysis and the creditworthiness evaluation of borrowers because they affect borrowers' cash flows and the likelihood of default on their debt obligations. Consequently, we develop our research by firstly reviewing the literature regarding ESG commitments within financial decision-making processes and then addressing the relation between ESG performance and the cost of debt financing. We reveal no unanimous results and no clear-cut boundaries on this matter yet. Secondly, to disentangle this relationship, which is not well defined by scholars, we empirically investigate the nexus between ESG performance and credit rating issues on a sample of 56 Italian and Spanish public firms for which ESG performance in 2015 was achieved. Our final sample includes 15 variables for 56 observations: 840 items are under analysis. Our findings suggest that ESG performance, especially concerning social and governance metrics, meaningfully affects credit ratings. We do not sort out significant results referring to environmental scores, so further research is needed to investigate this ever-growing matter and strengthen this considerable nexus.

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Section: The Impact Of Esg On Financial Decision-makingmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Linkage between ESG Performance and Credit Ratings: A Firm-Level Perspective Analysis

Devalle¹,

Fiandrino²,

Cantino³

2017

IJBM

View full text Add to dashboard Cite

show abstract

“…Previous literature shows that socially responsible US firms have lower cost of equity (El Ghoul et al, 2011) and debt (Attig et al, 2013;Chava, 2014;Goss and Roberts, 2011). Financing costs are more important in unregulated markets such as the US.…”

Section: Introductionmentioning

confidence: 99%

Corporate philanthropy and bank loans in China

Chen

Jiang

2015

Pacific-Basin Finance Journal

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“…See Table 8 in Appendix section for variable definitions Footnote 14 continued 14-BBB?, 13-BBB, 12-BBB-, 11-BB?, 10-BB, 9-BB-, 8-B?, 7-B, 6-B-, 5-CCC?, 4-CCC, 3-CC, 2-C, and 1-D&SD. 15 Attig et al (2013) find that CSR strengths and concerns may influence credit ratings and credit rating agencies tend to award relatively high ratings to firms with good social performance. Oikonomou et al (2011) also find CSR scores lead to improved credit quality.…”

Section: Regression Specificationmentioning

confidence: 99%