ESG activities and financial stability: The case of Korean financial firms

Seo Yun Choi; Doojin Ryu; Wonhee You

doi:10.1016/j.bir.2024.05.007

ESG activities and financial stability: The case of Korean financial firms

Seo Yun Choi
, Doojin Ryu
, Wonhee You

Department of Economics

Sungkyunkwan University

Research output: Contribution to journal › Article › peer-review

14 Scopus citations

Abstract

This study explores the relationship between financial firms' environmental, social, and governance (ESG) activities and their financial stability measured by Altman's Z-score. Based on a dataset of listed financial institutions in Korea, our results indicate a positive association between stability and ESG activities. Overall ESG scores and those for the individual environmental, social, and governance pillars potentially enhance financial stability. The environmental pillar plays the most significant role in improving the stability of financial firms. The positive association between ESG activities and financial firms' stability is also seen in nonbanking sectors.

Original language	English
Pages (from-to)	945-951
Number of pages	7
Journal	Borsa Istanbul Review
Volume	24
Issue number	5
DOIs	https://doi.org/10.1016/j.bir.2024.05.007
State	Published - Sep 2024

Keywords

ESG
Financial institution
Financial stability
Korean market
Z-score

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.bir.2024.05.007

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title = "ESG activities and financial stability: The case of Korean financial firms",

abstract = "This study explores the relationship between financial firms' environmental, social, and governance (ESG) activities and their financial stability measured by Altman's Z-score. Based on a dataset of listed financial institutions in Korea, our results indicate a positive association between stability and ESG activities. Overall ESG scores and those for the individual environmental, social, and governance pillars potentially enhance financial stability. The environmental pillar plays the most significant role in improving the stability of financial firms. The positive association between ESG activities and financial firms' stability is also seen in nonbanking sectors.",

keywords = "ESG, Financial institution, Financial stability, Korean market, Z-score",

author = "Choi, \{Seo Yun\} and Doojin Ryu and Wonhee You",

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TY - JOUR

T1 - ESG activities and financial stability

T2 - The case of Korean financial firms

AU - Choi, Seo Yun

AU - Ryu, Doojin

AU - You, Wonhee

PY - 2024/9

Y1 - 2024/9

N2 - This study explores the relationship between financial firms' environmental, social, and governance (ESG) activities and their financial stability measured by Altman's Z-score. Based on a dataset of listed financial institutions in Korea, our results indicate a positive association between stability and ESG activities. Overall ESG scores and those for the individual environmental, social, and governance pillars potentially enhance financial stability. The environmental pillar plays the most significant role in improving the stability of financial firms. The positive association between ESG activities and financial firms' stability is also seen in nonbanking sectors.

AB - This study explores the relationship between financial firms' environmental, social, and governance (ESG) activities and their financial stability measured by Altman's Z-score. Based on a dataset of listed financial institutions in Korea, our results indicate a positive association between stability and ESG activities. Overall ESG scores and those for the individual environmental, social, and governance pillars potentially enhance financial stability. The environmental pillar plays the most significant role in improving the stability of financial firms. The positive association between ESG activities and financial firms' stability is also seen in nonbanking sectors.

KW - ESG

KW - Financial institution

KW - Financial stability

KW - Korean market

KW - Z-score

UR - https://www.scopus.com/pages/publications/85194880050

U2 - 10.1016/j.bir.2024.05.007

DO - 10.1016/j.bir.2024.05.007

M3 - Article

AN - SCOPUS:85194880050

SN - 2214-8450

VL - 24

SP - 945

EP - 951

JO - Borsa Istanbul Review

JF - Borsa Istanbul Review

IS - 5

ER -

ESG activities and financial stability: The case of Korean financial firms

Abstract

Keywords

UN SDGs

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