Explanation of variables
| Variable | Description measure | Reference | Expected effect on ESG performance |
|---|---|---|---|
| Dependent variable | |||
| ESG variable (source: Refinitiv) | |||
| ESG performance (ESG_perf) | Comprehensive scoring of the environment, social and governance performance by the weighted average of the ESG scores and ESG controversies (captured from global media sources) (see Table 1) | ||
| Environmental performance (ENV_perf) | Comprehensive scoring of the environment performance by the average of its three dimensions (see Table 1) | ||
| Social performance (SOC_perf) | Comprehensive scoring of the social performance by the average of its four dimensions (see Table 1) | ||
| Governance performance (GOV_perf) | Comprehensive scoring of the governance performance by the average of its three dimensions (see Table 1) | ||
| Independent variables | |||
| Board gender equality variables (B_GEq) | |||
| Board gender equality (%) (%B_GEq) | Percentage of women on BoD (number of female directors divided by total number of board members) | Barako and Brown (2008), Adams and Ferreira (2009), Rupley et al. (2012), Amran et al. (2014), Rao and Tilt (2016a, 2016b), Husted and de Sousa-Filho (2019), Cucari et al. (2018), Galbreath (2018). Cordeiro et al. (2020) | Nonlinear |
| Board gender equality (n) (nB_GEq) | Number of women on BoD | ||
| Board mass of gender equality (massB_GEq) | Dummy variable that takes value 1 if the bank’s board has at least three women, 0 otherwise | Post et al. (2011), Fernandez-Feijoo et al. (2014), Liu (2018), Ben-Amar and McIlkenny (2015), Shoham et al. (2017) | Positive |
| Control variables | |||
| Board size (B_size)* | Total number of directors on the bank’s board at the end of the fiscal year | Said et al. (2009), Amran et al. (2014), Jensen (1993), de Andres and Vallelado (2008), Laksmana (2008) | Positive |
| Board independence (B_ind) | Percentage of independent or outside directors on the bank’s board | Ahmed et al. (2006), Chau and Gray (2010), Rao and Tilt (2016a, b) | Positive/negative |
| CSR/sustainability committee (CSR_com) | Dummy variable equal to 1 if the bank has a CSR committee, 0 otherwise | Liao et al. (2015), Hussain et al. (2018) | Positive |
| Bank size (SIZE)* | Natural logarithm of total assets of the bank (Euro) | Setó-Pamies (2015), Helfaya and Moussa (2017) | Positive |
| Return on equity (ROE) | Net income divided by the value of total shareholders’ equity | Setó-Pamies (2015), Helfaya and Moussa (2017) | Positive/negative |
| Leverage (LEV) | The ratio of Tier 1 capital to total assets (proxy for the Basel 3 leverage ratio) | Helfaya and Moussa (2017) | Positive |
| Governance model (Gov_mod) | Dummy variable equal to 1 if the bank has a two-tier board, 0 if the bank has a one-tier board | Gotti et al. (2021), Birindelli et al. (2018) | Positive/negative |
| Variable | Description measure | Reference | Expected effect on ESG performance |
|---|---|---|---|
| ESG performance (ESG_perf) | Comprehensive scoring of the environment, social and governance performance by the weighted average of the ESG scores and ESG controversies (captured from global media sources) (see | ||
| Environmental performance (ENV_perf) | Comprehensive scoring of the environment performance by the average of its three dimensions (see | ||
| Social performance (SOC_perf) | Comprehensive scoring of the social performance by the average of its four dimensions (see | ||
| Governance performance (GOV_perf) | Comprehensive scoring of the governance performance by the average of its three dimensions (see | ||
| Board gender equality (%) (%B_GEq) | Percentage of women on BoD (number of female directors divided by total number of board members) | Nonlinear | |
| Board gender equality ( | Number of women on BoD | ||
| Board mass of gender equality (massB_GEq) | Dummy variable that takes value 1 if the bank’s board has at least three women, 0 otherwise | Positive | |
| Board size (B_size)* | Total number of directors on the bank’s board at the end of the fiscal year | Positive | |
| Board independence (B_ind) | Percentage of independent or outside directors on the bank’s board | Positive/negative | |
| CSR/sustainability committee (CSR_com) | Dummy variable equal to 1 if the bank has a CSR committee, 0 otherwise | Positive | |
| Bank size (SIZE)* | Natural logarithm of total assets of the bank (Euro) | Positive | |
| Return on equity (ROE) | Net income divided by the value of total shareholders’ equity | Positive/negative | |
| Leverage (LEV) | The ratio of Tier 1 capital to total assets (proxy for the Basel 3 leverage ratio) | Positive | |
| Governance model (Gov_mod) | Dummy variable equal to 1 if the bank has a two-tier board, 0 if the bank has a one-tier board | Positive/negative | |
Note:
*Natural logarithmic transformations of the numerical (nonindex) variables
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