Open Access
Environmental performance and credit ratings : a transatlantic study
Loading...
Files
RSC_WP_Banking_and_Finance_2024_27.pdf (847.16 KB)
Full text in Open Access
License
Attribution 4.0 International
Access Rights
Cadmus Permanent Link
Full-text via DOI
ISBN
ISSN
1028-3625
Issue Date
Type of Publication
LC Subject Heading
Other Topic(s)
EUI Research Cluster(s)
Initial version
Published version
Succeeding version
Preceding version
Published version part
Earlier different version
Initial format
Author(s)
Citation
EUI; RSC; Working Paper; 2024/27; Florence School of Banking and Finance; Banking Supervision Policy
Cite
HU, Haoshen, LAZAR, Emese, PAN, Jingqi, WANG, Shixuan, Environmental performance and credit ratings : a transatlantic study, EUI, RSC, Working Paper, 2024/27, Florence School of Banking and Finance, Banking Supervision Policy - https://hdl.handle.net/1814/77171
Abstract
This paper investigates the impact of the firms’ environmental performance on their credit rating. To this end, we conduct a transatlantic study covering companies in the United States (US) and in the European Union (EU). Our study reveals that firms’ environmental improvements positively contribute to their credit ratings. However, this effect varies between the US and the EU. If US and European firms enhance their environmental performance by the same scale, the former’s creditworthiness benefits more than the latter’s. Additionally, we show that improvements in environmental performance affect credit ratings linearly in the US but nonlinearly in the EU. These findings shed light on the implications of the firms’ environmental performance and provide critical insights into the impact of corporate sustainability indicators on credit ratings.
Table of Contents
Additional Information
This paper is part of the Banking Supervision Policy Working Paper Series in the context of the SSM-EUI partnership on SSM Banking Supervision Learning Services.