The Impact of ESG on Banks' Sense of Environmental Responsibility

This research meticulously analyzed 26 Chinese banks listed on the stock market, with a concentrated focus on their social responsibility reports and financial metrics. The primary objective was to deeply investigate the behavioral patterns of commercial banks in the environmental responsibility sphere and the related outcomes. For this purpose, the study innovatively introduced a novel index, the Environmental Responsibility Index (ERI), which amalgamates the Green Credit Ratio (GCR) and the Total Green Credit (TGC), employing Z-score and weighted methods for processing. The ERI was utilized as the variable to be explained, aiming to provide a more comprehensive evaluation of the banks' environmental responsibility performance. Additionally, the research encompassed a holistic assessment of the banks' performance in environmental, social, and corporate governance (ESG) dimensions. The results of the study revealed a complex yet insightful phenomenon: at the initial stages of banking operations, there was a non-significant or even negative correlation between ESG and environmental responsibility. This could suggest a latency in the effects. It was observed that with a time lag in the comprehensive ESG score and its individual components, their impact on the environmental responsibility of commercial banks gradually shifted from neutral or negative to positive.