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Banking Stability in the ESG Framework Across Italian Regions

Author

Listed:
  • Massimo Arnone

    (Unict - Università degli studi di Catania = University of Catania)

  • Angelo Leogrande

    (LUM University Giuseppe Degennaro)

  • Alberto Costantiello

    (LUM University Giuseppe Degennaro)

  • Lucio Laureti

    (LUM University Giuseppe Degennaro)

Abstract
This work aims to initiate a reflection on the awareness of environmental, social, and corporate governance issues, summarized in the acronym ESG (Environmental, Social, Governance), among Italian SMEs. The integration of ESG issues into business models has led to an expansion of the risk taxonomy affecting corporate management. In addition to traditional financial risks, new risks have emerged, primarily climate risk, environmental, and energy risks, which can significantly impact companies' ability to create economic value. This includes planning and designing virtuous initiatives focused on sustainability and the ability to build public-private partnerships with various stakeholders. After this theoretical framework aimed at highlighting the evolution of the concept of corporate sustainability following the introduction of ESG factors, a clustering of non-performing loans of Italian companies is proposed using a k-Means algorithm, comparing the results obtained through two different methods, namely the Elbow method and the Silhouette coefficient. Finally, using data on Italian regions between 2004 and 2023, an empirical analysis is conducted to provide an estimate of the relationship between non-performing loans and some variables related to ESG components.

Suggested Citation

  • Massimo Arnone & Angelo Leogrande & Alberto Costantiello & Lucio Laureti, 2024. "Banking Stability in the ESG Framework Across Italian Regions," Working Papers hal-04647121, HAL.
    • Handle: RePEc:hal:wpaper:hal-04647121
    Note: View the original document on HAL open archive server: https://hal.science/hal-04647121
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    More about this item

    Keywords

    Sustainability ESG non performing loans SMEs clustering JEL CODES: G1 G10 G11 G12 G13 G14 G15; Sustainability; ESG; non performing loans; SMEs; clustering JEL CODES: G1; G10; G11; G12; G13; G14; G15;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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