Does climate news sway investors away from large financiers of fossil fuel projects?
-
Author(s)Chekani NkwairaLink to ORCID Index: https://orcid.org/0000-0001-8098-3606
,
Huibrecht Margaretha van der PollLink to ORCID Index: https://orcid.org/0000-0002-0887-4138
-
DOIhttp://dx.doi.org/10.21511/imfi.21(1).2024.15
-
Article InfoVolume 21 2024, Issue #1, pp. 185-197
- 223 Views
-
64 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Despite rapid growth in climate news coverage, some banks are increasing financing towards greenhouse gas emitters with investors whose decisions intensify climate challenges. This study aims to establish the impact of climate news on investment decisions involving banks’ intensified fossil fuel financing and recommend remedies. Descriptive, linear regression analyses and the two-sample t-test are applied. The list of bank stems from the Consumer News and Business Channel website. Share prices, traded shares and market capitalizations are obtained from Macrotrends and Companies’ market cap websites for computing demand and holding periods. Results reveal more demand for riskier banks after European symposiums in contrast to Asia’s reduction. It is established that no significant linear relationships exist between demand and holding periods with t < T and p-value > 0.05. The null hypothesis of no linear relationship is not rejected. There is more price risk in Europe than in Asia with average volatilies of 0.439871 and 0.067472, respectively, at p-value 0.002117 < 0.05 based on the two-sample t-test. The null hypothesis of no difference in volatility means is rejected. The higher volality risk corresponds to higher demand for riskier bank shares in Europe. Climate news persuades Asian investors to reduce the demand for the banks’ shares. Conversely, European investors demonstrate behaviors incompatible with climate risk mitigation, particularly in periods after symposiums. A Global climate risk blacklisting initiative and a publicised Global climate risk index should accompany downgrades aimed at fossil fuel project financiers. Coverage of these measures at conferences may influence more investors to make correct decisions.
- Keywords
-
JEL Classification (Paper profile tab)G21, G11, G15
-
References34
-
Tables2
-
Figures4
-
- Figure 1. Europe before COPs
- Figure 2. Europe after COPs
- Figure 3. Asia before COPs
- Figure 4. Asia after COPs
-
- Table 1. Linear relationship and inferential statistics
- Table 2. Two-sample t-test
-
- Andersson, M., Bolton, P., & Samama, F. (2016). Hedging Climate Risk. Financial Analysts Journal, 72(3), 13-32.
- Asadnabizadeh, M. (2019). Analysis of Internal Factors of the Swing States in the International Climate Change Negotiations: A Case Study of Poland in COP24. American Journal of Climate Change, 08(02), 263-283.
- Bai, Y. (2011). Financing a Green Future: An Examination of China’s Banking Sector for Green Finance (Thesis). Lund University.
- Balibar, S. (2017). Energy transitions after COP21 and 22. Comptes Rendus Physique, 18(7-8), 479-487.
- Banerjee, S. B. (2012). A Climate for Change? Critical Reflections on the Durban United Nations Climate Change Conference. Organization Studies, 33(12), 1761-1786.
- Campiglio, E., Dafermos, Y., Monnin, P., Ryan-Collins, J., Schotten, G., & Tanaka, M. (2018). Climate change challenges for central banks and financial regulators. Nature Climate Change, 8(6), 462-468. Nature Publishing Group.
- Chakrabarty, B., Moulton, P. C., Trzcinka, C., Anand, A., Bailey, W., Battalio, R., Ben-Rephael, A., Goncalves-Pinto, L., Harris, J., Holden, C., Irvine, P., Jain, R., Jennings, B., Lerner, P., Ma, Q., O’hara, M., Obizhaeva, A., Patel, A., Saar, G., … Wermers, R. (2013). Institutional Holding Periods. Journal of Financial and Quantitative Analysis (JFQA), 1-52.
- Chang, R. P., Ko, K. C., Nakano, S., & Ghon Rhee, S. (2018). Residual momentum in Japan. Journal of Empirical Finance, 45, 283-299.
- Choi, P., & Mukherji, S. (2010). Optimal Portfolios For Different Holding Periods. Journal of Business & Economics Research, 8(10), 1-6.
- Climate Watch Historical GHG Emissions Data. (2022). Climate Watch.
- Condon, M. (2021). Market Myopia’s Climate Bubble. Utah Law Review, 63, 1-65.
- Cullen, J. (2018). After “HLEG”: EU Banks, Climate Change Abatement and the Precautionary Principle. Cambridge Yearbook of European Legal Studies, 20, 61-87.
- Dhankar, R. S., & Maheshwari, S. (2014). A Study of Contrarian and Momentum Profits in Indian Stock Market. International Journal of Financial Management, 4(2).
- Dirikx, A., & Gelders, D. (2010). To Frame is to Explain: A Deductive Frame-analysis of Dutch and French Climate Change Coverage during the Annual UN Conferences of the Parties. Public Understanding of Science, 19(6), 732-742.
- Durrani, A., Rosmin, M., & Volz, U. (2020). The Role of Central Banks in Scaling Up Sustainable Finance – What Do Monetary Authorities in the Asia-Pacific Region Think? Journal of Sustainable Finance and Investment, 10(2), 92-112.
- Hopke, J. E., & Hestres, L. E. (2018). Visualizing the Paris Climate Talks on Twitter: Media and Climate Stakeholder Visual Social Media During COP21. Social Media and Society, 4(3).
- Klenert, D., Funke, F., Mattauch, L., & O’Callaghan, B. (2020). Five Lessons from COVID-19 for Advancing Climate Change Mitigation. Environmental and Resource Economics, 76(4), 751-778.
- Kress, J. C. (2022). Banking’s Climate Conundrum. American Business Law Journal, 59(4), 679-724.
- Lennan, M., & Morgera, E. (2022). The Glasgow Climate Conference (COP26). International Journal of Marine and Coastal Law, 37(1), 137-151.
- Lück, J., Wozniak, A., & Wessler, H. (2016). Networks of Coproduction: How Journalists and Environmental NGOs Create Common Interpretations of the UN Climate Change Conferences. The International Journal of Press/Politics, 21(1), 25-47.
- Monasterolo, I., & De Angelis, L. (2020). Blind to Carbon Risk? An Analysis of Stock Market Reaction to the Paris Agreement. Ecological Economics, 170, 106571.
- Nofsinger, J. R. (2017). The Psychology of Investing (6th ed.). Routledge.
- Obergassel, W., Arens, C., Hermwille, L., Kreibich, N., Mersmann, F., Ott, H. E., & Wang-Helmreich, H. (2018). The Calm Before the Storm: An Assessment of the 23rd Climate Change.
- OCI team. (2023) Banking on climate chaos: Fossil fuel financing.
- Park, H., & Kim, J. D. (2020). Transition Towards Green Banking: Role of Financial Regulators and Financial Institutions. Asian Journal of Sustainability and Social Responsibility, 5(1).
- Pilatin, A. (2022). In the Context of behavioral Finance, Do Investor Characteristics Affect Stock Holding Period? KAÜİİBFD, 13(25), 244-266.
- Punzi, M. T. (2019). Role of Bank Lending in Financing Green-Projects. In Handbook of Green Finance (pp. 237–259). Asian Development Bank Institute.
- Ritter, R. (2022). Banking Sector Exposures to Climate Risks: Overview of Transition Risks in the Hungarian Corporate Loan Portfolio. Financial and Economic Review, 21(1), 32-55.
- Schäfer, M. S., & Schlichting, I. (2014). Media Representations of Climate Change: A Meta-analysis of the Research Field. Environmental Communication, 8(2), 142-160.
- Schmidt, A., Ivanova, A., & Schäfer, M. S. (2016). Media Attention for Climate Change around the World: A Comparative Analysis of Newspaper Coverage in 27 Countries. Global Environmental Change, 23(5), 1233-1248.
- SGK Planet. (2023). FAQs about the COP, Conference of the Parties.
- Smales, L. A. (2015). Asymmetric volatility response to news sentiment in gold futures. Journal of International Financial Markets, Institutions and Money, 34, 161-172.
- Wessler, H., Wozniak, A., Hofer, L., & Lück, J. (2016). Global Multimodal News Frames on Climate Change: A Comparison of Five Democracies around the World. The International Journal of Press/Politics, 21(4), 423-445.
- Wozniak, A., Wessler, H., Chan, C.-H., & Lück, J. (2021). The Event-Centered Nature of Global Public Spheres: The UN Climate Change Conferences, Fridays for Future, and the (Limited) Transnationalization of Media Debates. International Journal of Communication, 15, 688-714.
-
Evaluating the nationalization & privatization effect: a case of Indian banking industry
Manju Rajan Babu ,
Ashok Kumar M.
doi: http://dx.doi.org/10.21511/bbs.13(1).2018.02
Banks and Bank Systems Volume 13, 2018 Issue #1 pp. 11-21 Views: 2902 Downloads: 409 TO CITE АНОТАЦІЯThe facilitation of economic transactions and friendly investor environment is undertaken through effective performance of financial systems. Mobilization of savings and funding the profitable business opportunities are essential in improving the efficiency of intermediation. The study aims to evaluate the effects of nationalization and privatization on Indian banks. Various factors have been considered to examine the effects of privatization and nationalization, including sources of public sector inefficiency, measures of firm performance, econometric issues, and the mode of privatization. The data was collected for the period of 1998 to 2016 from Indian banks. Data Envelopment Analysis (DEA) was used to evaluate the financial reports of the banks selected to evaluate the efficiency of input and output variables. Positive results were observed, concerning the efficiency and profitability of banking industry after banks’ privatization. Performance of private banks has been observed effective and efficient as compared to the public sector banks. Privatization of banks must be increased and maintained to sustain the efficiency of the banks and implement strategies to maintain the assets. Future studies may recruit more appropriate sample size to evaluate the privatization and nationalization effects of Indian banking industry. Greater number of banks will provide more precise results, using data envelopment analysis.
-
ERP implementation in banks: success factors & impact on financial performance
Banks and Bank Systems Volume 12, 2017 Issue #4 pp. 17-30 Views: 2749 Downloads: 1155 TO CITE АНОТАЦІЯThe study aims to measure the extent of implementing ERP systems in the banking sector in Jordan, and identify the main factors that influence the implementation decision, in addition to measure the impact of the post-implementation of the ERP system on the financial performance. The study utilized a content analysis as a research instrument. The study of population consisted of all the banks in Jordan, where the study applied ‘Purposive Sample’ type. Therefore, the study included 11 banks from 2011 to 2016.
The study indicated that the implementation year of the ERP system started in most of the Jordanian banks in 2013, and the rates vary from bank to bank according to their importance and the level of awareness. Training courses are considered the main variable that these banks face in the process of implementation. In addition, awareness of the advantages, the cost, and supporting the infrastructure are the core factors needed to influence the implementation decision.
There is no impact when implementing an ERP system on the financial performance of the Jordanian banks in regard to the ROI and the DPS; on the other hand, there is an impact of the ERP system on the overall performance of the banks.
The study recommends to disseminate knowledge on the advantages of implementing of ERP system in Jordanian banks and to develop the IT department efficiency. Moreover, it will be worthwhile to examine the effect of ERP systems by utilizing financial and non-financial measurements. -
Retraction: Leaders and decision making: a study of the drivers of courage
Rasoava Rijamampianina
doi: http://dx.doi.org/10.21511/ppm.16(1).2018.31
Problems and Perspectives in Management Volume 16, 2018 Issue #1 pp. 320-329 Views: 2099 Downloads: 197 TO CITE АНОТАЦІЯRetracted on the 15th of October, 2020 by the Journal’s Editor-in-Chief request dated October 12, 2020. The type of retraction – plagiarism.
The journal was asked to retract this article because of plagiarism. The request came from the author of the article. The author informed the journal that original idea published in this paper wasn’t his and asked to remove the article.
