Sustainable Banking in the Global South: ESG Innovations in China

• Alvaro Mendez ^[1] ; Francisco Javier Forcadell ^[2] ; Fernando Ubeda ^[3]
  1. [1] Fudan University

     Fudan University

     China

     
  2. [2] Universidad Rey Juan Carlos

     Universidad Rey Juan Carlos

     Madrid, España

     
  3. [3] Universidad Autónoma de Madrid

     Universidad Autónoma de Madrid

     Madrid, España

     

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• Localización: ESIC Digital Economy & Innovation Journal, ISSN-e 2792-8721, Vol. 1, Nº. 1, 2021, págs. 120-136
• Idioma: inglés
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• Resumen

  • This descriptive study uses data from 4 countries in the global South to measure the sustainability of domestic commercial banks over the period 2007-2019, focussing on the People’s Republic of China (PRC). We estimated the level of sustainability of the Chinese banking sector over the period 2007 to 2019, comparing it to Brazil, India, and Mexico. We found that unlike these counterparts Chinese State-owned Banks (SoBs) have responded with alacrity to the pressures exerted by state-led innovations like the Green Credit Policy which were intended to encourage the adoption of Environmental, Social, and Governance (ESG) norms. We also found such public policies had derived from a process of Beijing’s learning from the organizational innovations of international financial institutions like the World Bank. Our study is novel in suggesting that public policy can bring about innovation toward sustainability, and if it has widened the adoption of ESG criteria in China, it may be applicable elsewhere in the global South. These green developments have already made a mark on China’s domestic banking industry so as to render it an example worth emulating (IISD, 2015). China has a long way to go, but it is a leader in the global South in the sustainability of its monetary and financial systems.