In recent years, the impact of climate change has had disastrous effects on a global scale, posing severe threats to the world economy. Additionally, the Covid-19 has further exacerbated the global economic downturn. The banking industry bears a substantial responsibility in mitigating climate change and plays a pivotal role in supplying funds, which is vital for financial stability and economic development. Banks with robust corporate governance can effectively mitigate the risks associated with implementing response policies and enhance their efficiency. Consequently, this study will examine the impact of the implementation of corporate governance policies and participation in climate change initiatives by banks on their efficiency.
This study examines banks from European and Asian countries during the period from 2017 to 2022. To calculate bank efficiency, Data Envelopment Analysis (DEA) is employed to derive cost efficiency values. Subsequently, a two-stage Tobit regression is used to investigate the relationship between participation in climate change initia-tives and corporate governance on bank efficiency. The empirical results show that ac-tive participation in climate change initiatives and reducing carbon emissions have a significant positive impact on bank efficiency. Increasing the proportion of gender di-versity in the board of directors and enhancing the proportion of independent directors also positively and significantly affect bank efficiency. Finally, this study further ex-amines the interaction effects of the above variables on bank efficiency. The results indicate that increasing the proportion of female directors and reducing carbon emis-sions have a significant and positive impact on bank efficiency, suggesting that female directors contribute to reducing carbon emissions, thereby improving bank efficiency.
