ESG Performance and Bank Systemic Risk : Evidence from China

How to effectively prevent and mitigate systemic risks in the context of exponential growth in sustainable development investments is a crucial question. Our research examines the influence of ESG performance on bank systemic risk. By analyzing 36 listed banks in China, we found higher ESG performance increases the level of bank systemic risk spillovers. This impact on systemic risk is attributed to the expansion of interbank operations and decreased bank liquidity. Notably, the impact is more pronounced among non-state banks and larger size banks. However, we found that banks with higher levels of corporate transparency can successfully mitigate this impact