Does ESG Affect Bank Lending to Companies?

Abstract

with the serious intensification of global warming in recent years, countries around the world are actively developing carbon neutrality, carbon peaking, and reducing carbon emissions to ensure a healthier operation of the earth. To cooperate with the low-carbon policies of various countries, companies have also begun to implement policies to reduce carbon emissions and save energy, so ESG has gradually become a hot topic. ESG indicators are also becoming increasingly important in the financial industry. This research is a review essay. The research direction is to explore whether ESG indicators will affect corporate credit in banks by studying the policies and various data on carbon emissions that have been released by countries and by reading published papers. Through research on government policies and current thesis research, it is shown that there are currently no clear policies or rules stipulating how ESG indicators will affect corporate credit in banks, but the current banking industry will indeed pay more attention to ESG performance of companies when leading to companies, good ESG indicators will lead to better bank credit and lower cost of banking credit.