Signatories show stronger ESG

Banks that sign global climate pledges tend to run greener shops and make greener loans than banks that do not, according to a 2025 working paper based on emerging-market data. (iza.org) The paper, “Walking the Talk? Bank Climate Commitments and Green Lending in Emerging Markets,” was first published as a Centre for Economic Policy Research discussion paper on September 12, 2025 and revised on February 19, 2026. Mariana Bernad, Ralph De Haas and Juan Pablo Rud used structured surveys of 644 bank chief executives and heads of credit across 33 low- and middle-income countries. (ralphdehaas.com) The authors built two scorecards: one for “green management,” meaning how banks organize climate policies inside the firm, and one for “green lending,” meaning how they screen and steer loans. Banks that had signed international climate initiatives scored higher on both measures than non-signatories. (ralphdehaas.com) The same study linked bank data to surveys of 4,719 firms and found that borrowers of climate-committed banks were more likely to make green investments. Using branch and firm locations, the authors also found that environmentally oriented firms were more likely to borrow from climate-committed banks nearby. (iza.org) That result lands in a debate over whether voluntary climate alliances change lending or mainly change marketing. The authors wrote that earlier evidence was “mostly discouraging,” citing research that found weak shifts in lending patterns or borrower engagement even after banks joined high-profile initiatives. (cepr.org) The backdrop is a banking industry that has spent two decades building voluntary climate frameworks. The Equator Principles, launched in 2003, set a common risk-management standard for environmental and social issues in project finance, while the Task Force on Climate-related Financial Disclosures published its disclosure recommendations in June 2017. (ifc.org) (fsb.org) Those initiatives grew into a much larger transition-planning push. Glasgow Financial Alliance for Net Zero said in January 2025 that more than 500 financial institutions representing over $100 trillion in balance sheets had developed transition plans using its framework. (gfanzero.com) Bank-specific alliances have also faced strain. The United Nations Environment Programme Finance Initiative said its 2024 Net-Zero Banking Alliance progress report covered 122 member banks, while legal and industry reporting in October 2025 said the alliance later ceased operations after a wave of exits and a restructuring vote. (unepfi.org) (esgtoday.com) The new paper does not say a signature alone causes better lending decisions everywhere. It says signatories in its sample looked different on internal practice and borrower outcomes, giving investors, regulators and rival banks a measurable benchmark for what climate commitments can look like in day-to-day banking. (iza.org)