Does banks’ environmental engagement impact funding costs?
研究全球样本中银行环境参与对融资成本的影响，发现环境参与强的银行融资成本更低，尤其在发达、低集中度市场，但经济危机时投资者更关注回报。
• Banks’ environmental engagement significantly reduces funding costs. • Banks with low deposits in advanced and less concentrated markets benefit more. • The Paris Agreement enhanced climate awareness among depositors and investors. • During rising real rates and crises, investors prioritise returns over eco concerns. • Eco-friendly banks attract support due to their favourable risk, capital, and size. Despite growing research on corporate environmental performance, the effect of banks’ environmental engagement on funding costs remains unclear. While some evidence suggests that environmentally committed banks secure lower funding costs, other studies report no significant effect, leaving the evidence inconclusive. This study addresses this inconsistency by analysing distinct funding cost measures in a global sample and demonstrating that banks with strong environmental engagement consistently benefit from reduced funding costs across multiple dimensions. The advantage is more pronounced among banks in advanced, less concentrated economies with stronger currencies and lower deposit levels. The Paris Agreement has raised awareness among depositors and investors about their role in mitigating climate change. Although such support is generally driven by sound risk management, capital adequacy, and asset size, periods of rising real interest rates and economic crises shift priorities toward higher financial returns. Our results remain robust across alternative samples, model specifications, estimation methods, funding cost measures, and endogeneity correction techniques.