The Influence of Innovation on Corporate Sustainability in the International Banking Industry

Forcadell, Francisco Javier; Aracil, Elisa; Úbeda, Fernando

doi:10.3390/su11113210

Cited by 38 publications

(71 citation statements)

References 112 publications

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“…Thus, the topic of the fair distribution of salaries among high profile sustainable companies is simply marginalized or even totally ignored. It confirms that although sustainability rating agencies implement complex filters to identify the companies with the best practices, they might actually include firms which might not fully deserve this label [43]. Furthermore, it also shows that there is still much confusion when it comes about proper and unambiguous typology of corporate sustainability [44].…”

Section: Discussionmentioning

confidence: 79%

Corporate Sustainability and CEO–Employee Pay Gap—Buster or Booster?

2019

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There is a general agreement that extensive remuneration gaps may cause pressing environmental, social, and economic problems. Thus, a critical question to be answered is what is the effect of being at the forefront of corporate sustainability on the CEO–employee pay gap. This paper addresses the question by examining empirical evidence from 415 constituents of the S&P 1500 index over the years 2006–2016. For the above period, we found a positive relationship between a strong commitment to sustainable development at the firm level and the CEO–employee pay differential. Additionally, firms characterized by higher performance, growth potential, and financial robustness constituted more dispersed salary distribution environments. The findings also suggest that CEO gender has a significant effect on the pay gap with a moderating influence of female CEOs. The paper contributes to the literature by shedding additional light on the urgent need for the implementation of a limit capping the CEO–worker pay ratio at a certain, responsible level as one of screening criteria used by sustainability ranking providers. Furthermore, it also shows that leading corporations in the area of sustainability do not implement any serious solutions in the above area on their own accord.

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Section: Discussionmentioning

confidence: 79%

Corporate Sustainability and CEO–Employee Pay Gap—Buster or Booster?

2019

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“…For doing so, we estimate a translog cost function (Berger et al, 2005;Bos and Schmiedel, 2007;Lozano-Vivas and Pasiouras, 2010), including the following variables: banks' total loans and investments (output variables), total employee expenses and total non-interest operating expenses (input variables), the debt/equity ratio (controls), and, t and t 2 (trend variables). We define the technological gap as the distance to this meta-frontier (Fontin and Lin, 2019;Forcadell et al, 2019). The most efficient banks place themselves in the meta-frontier and thus their technological gap is one.…”

Section: Independent Variablesmentioning

confidence: 99%

The Impact of Corporate Sustainability and Digitalization on International Banks’ Performance

2020

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We analyse the implications for international banks of two contemporary megatrends: corporate sustainability (CS) and digitalization. The digital environment and the availability of massive data from customers generate asymmetric information for banks to the detriment of customers, who experience individual vulnerabilities such as privacy rights. This can hinder the positive influence of digitalization in banks' performance, with relevant managerial and political implications. In this context, the reputation generated by CS strategies can constitute a credence factor that reduces customers' fears of opportunistic behavior and information asymmetries. We test and find support for our hypothesis over a panel data of large international banks from developed countries. Our findings shed light on the mutual reinforcement of CS and digitalization strategies in enhancing banks' market performance and efficiency. Policy Implications• Our study shows that digitalization requires the complementary action of CS-based reputation to enhance banks' performance. This suggests the need for reputation building in those sectors (public and private) immersed in the digital transformation. By doing so, organizations can reduce information asymmetries for their main stakeholders. Since CS efforts exhibit an important potential for building organizational reputation, governments should stimulate the firms' CS investments.• Banks' survival against disruptive forces urges to reconsider the basis of its business model. It is not sufficient to react against digital-born companies' menace with M&A-driven strategies. For that reason, we suggest that including CS in the basis of the banking business model can contribute to achieving better market performance and efficiency and to overcoming fierce competition by new entrants.

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“…In this vein, Forcadell and Aracil [11] have identified two main issues in which banks could act directly in the design and implementation of SIBs as an investor, specifically, education and financial inclusion. For banks, these sustainability-related strategies have been a means to restore damaged reputations after the global financial crisis [12]. In this sense, some banks (e.g., BNP Paribas, ABN AMRO, UBS, or Deustche Bank) have launched their own SIBs [10].…”

Section: Introductionmentioning

confidence: 99%

Sustainable Banking: New Forms of Investing under the Umbrella of the 2030 Agenda

2020

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(1) Social Impact Bonds (SIBs) foster the relationships between public and private sectors while adding value to new forms of investment that are closely linked to Socially Responsible Investments (SRIs). In this context, Sustainable Developments Goals (SDGs) aim to strengthen global partnerships in order to achieve the 2030 Agenda. Sustainable banking should consider its role in both new responsible investment products and the 2030 Agenda. This study aims to: (i) estimate the ROI of SIBS, (ii) define a financial formulation and a measurement system, and (iii) explain the relationship between SIBs and SDGs. (2) This research analyzes SIBs from an SDG approach, and proposes a valuation model based on a financial options valuation methodology that clarifies the financial value of the world’s first SIB (Peterborough Prison, UK). (3) Findings suggest that investors expect to have a negative return of 16.48%, and that this expected loss may be compensated for by the short- and long-term positive impact of an intervention in society. (4) It is shown that SIBs provide an opportunity to reach SDG 17 and improve sustainable investment portfolios, while providing an opportunity to strengthen a company’s Corporate Social Responsibility policy and its corporate reputation.

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The Influence of Innovation on Corporate Sustainability in the International Banking Industry

Cited by 38 publications

References 112 publications

Corporate Sustainability and CEO–Employee Pay Gap—Buster or Booster?

Corporate Sustainability and CEO–Employee Pay Gap—Buster or Booster?

The Impact of Corporate Sustainability and Digitalization on International Banks’ Performance

Sustainable Banking: New Forms of Investing under the Umbrella of the 2030 Agenda

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