Principles for responsible banking and sustainable development goals: an empirical investigation on European wholesale and retail banks

Abstract

This article undertakes an empirical analysis of the role that principles of responsible banking (PRB) plays in the progress towards sustainable development goals (SDGs) in the case of Europe. Results suggest that in countries where the share of wholesale banks that are signatories to PRB is higher, progress towards SDGs is at a more advanced stage. However, the same is not the case for retail banks. This can be attributed to the crucial role that corporate and investment banking plays in financing large-scale projects that support the SDGs, such as renewable energy and sustainable agriculture, as opposed to retail banks that typically have a more limited capacity to finance sustainability-linked projects.