IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i12p4940-d1411574.html
   My bibliography  Save this article

Sustainable Value Chain for Sustainable Lending of State-Owned Banks in Indonesia

Author

Listed:
  • Kepas Antoni Adrianus Manurung

    (School of Business, IPB University, Bogor 16151, Indonesia)

  • Hermanto Siregar

    (Department of Economics, Faculty of Economics and Management, IPB University, Bogor 16680, Indonesia)

  • Idqan Fahmi

    (School of Business, IPB University, Bogor 16151, Indonesia)

  • Dedi Budiman Hakim

    (Department of Economics, Faculty of Economics and Management, IPB University, Bogor 16680, Indonesia)

Abstract

Banks have enormous potential to support the achievement of sustainable development goals (SDGs) in accordance with their function as financial intermediaries through sustainable lending. However, the average national financing growth for the sustainable business activity category over the past four years is still 12%. The aim of this research is to identify the conditions of sustainable lending at state-owned conventional banks and analyze the influence of the value chain, economic performance, and ESG performance on sustainable lending. The research was conducted at state-owned commercial banks in Indonesia. The research utilized structural equation modeling (SEM). The SEM results of this study describe value chain, ESG performance (environmental, social, and governance), and economic performance and have direct and positive influences on sustainable lending, of which ESG performance has the biggest influence. As per each individual aspect, social orientation makes the biggest contribution toward sustainable lending.

Suggested Citation

  • Kepas Antoni Adrianus Manurung & Hermanto Siregar & Idqan Fahmi & Dedi Budiman Hakim, 2024. "Sustainable Value Chain for Sustainable Lending of State-Owned Banks in Indonesia," Sustainability, MDPI, vol. 16(12), pages 1-21, June.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:12:p:4940-:d:1411574
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/12/4940/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/12/4940/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Folasade Bosede Adegboye & Romanus Osabohien & Felicia Omowunmi Olokoyo & Oluwatoyin Augustina Matthew, 2020. "Foreign direct investment, globalisation challenges and economic development: an African sub-regional analysis," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 13(4), pages 414-433.
    2. Michael Hergert & Deigan Morris, 1989. "Accounting data for value chain analysis," Strategic Management Journal, Wiley Blackwell, vol. 10(2), pages 175-188, March.
    3. Giedrė Lapinskienė & Irena Danilevičienė, 2023. "Assessment of Green Banking Performance," Sustainability, MDPI, vol. 15(20), pages 1-16, October.
    4. Alexander Bassen & Ana Maria Kovács, 2008. "Environmental, Social and Governance Key Performance - Indicators from a Capital Market Perspective," Zeitschrift für Wirtschafts- und Unternehmensethik - Journal for Business, Economics & Ethics, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 9(2), pages 182-192.
    5. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    6. Alexander Bassen & Ana Maria Kovács, 2008. "Environmental, Social and Governance Key Performance - Indicators from a Capital Market Perspective," Zeitschrift für Wirtschafts- und Unternehmensethik - Journal for Business, Economics & Ethics, Rainer Hampp Verlag, vol. 9(2), pages 182-192.
    7. Marco Taliento & Christian Favino & Antonio Netti, 2019. "Impact of Environmental, Social, and Governance Information on Economic Performance: Evidence of a Corporate ‘Sustainability Advantage’ from Europe," Sustainability, MDPI, vol. 11(6), pages 1-26, March.
    8. Jiang, Haiyun & Xu, Shulin & Cui, Jingwen & Subhani, Ghulam, 2023. "The impact of bank capital, liquidity and funding liquidity on sustainable bank lending: Evidence from MENA region," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 713-726.
    9. Rahat, Birjees & Nguyen, Pascal, 2023. "Does ESG performance impact credit portfolios? Evidence from lending to mineral resource firms in emerging markets," Resources Policy, Elsevier, vol. 85(PB).
    10. Galvin, Peter & Arndt, Felix, 2014. "Strategic management: Building depth as well as breadth," Journal of Management & Organization, Cambridge University Press, vol. 20(02), pages 139-147, March.
    11. Herenia Gutiérrez-Ponce & Sigit Arie Wibowo, 2023. "Do Sustainability Activities Affect the Financial Performance of Banks? The Case of Indonesian Banks," Sustainability, MDPI, vol. 15(8), pages 1-17, April.
    12. Ali Naimi-Sadigh & Tayebeh Asgari & Mohammad Rabiei, 2022. "Digital Transformation in the Value Chain Disruption of Banking Services," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1212-1242, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maha Faisal Alsayegh & Rashidah Abdul Rahman & Saeid Homayoun, 2020. "Corporate Economic, Environmental, and Social Sustainability Performance Transformation through ESG Disclosure," Sustainability, MDPI, vol. 12(9), pages 1-20, May.
    2. Preeti Sharma & Priyanka Panday & R. C. Dangwal, 2020. "Determinants of environmental, social and corporate governance (ESG) disclosure: a study of Indian companies," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(4), pages 208-217, December.
    3. Irene Wei Kiong Ting & Noor Azlinna Azizan & Rajesh Kumar Bhaskaran & Sujit K Sukumaran, 2019. "Corporate Social Performance and Firm Performance: Comparative Study among Developed and Emerging Market Firms," Sustainability, MDPI, vol. 12(1), pages 1-21, December.
    4. Souhir Khemir, 2011. "Identification des attentes et des besoins des professionnels financiers tunisiens en matière de critères ESG," Post-Print hal-00650534, HAL.
    5. Jiří Hřebíček & Oldřich Trenz & Eliška Vernerová, 2013. "Optimal set of agri-environmental indicators for the agricultural sector of Czech Republic," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(7), pages 2171-2181.
    6. Chaokai Xue & Xinghua Dang & Beibei Shi & Jing Gu, 2019. "Information Sharing and Investment Performance in the Venture Capital Network Community: An Empirical Study of Environmental-Social-Governance Start-Ups," IJERPH, MDPI, vol. 16(6), pages 1-18, March.
    7. Burger, Eric & Grba, Fabian & Heidorn, Thomas, 2022. "The impact of ESG ratings on implied and historical volatility," Frankfurt School - Working Paper Series 230, Frankfurt School of Finance and Management.
    8. Diana-Maria Tînjalã & Alexandru Buglea, 2015. "Key Sustainability Metrics For Labour Practices – A Comparative Evolution Of Freedom Of Association And Of Non-Discrimination In Emerging/Frontier And Developed Markets," GUT FME Conference Publications, in: Katarzyna Stankiewicz (ed.),Contemporary Issues and Challenges in Human Resource Management, chapter 2, pages 18-31, Faculty of Management and Economics, Gdansk University of Technology.
    9. Zuzana Chvátalová & Iveta Šimberová, 2012. "Analysis and identification of joint performance measurement indicators: social and corporate governance issues," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(7), pages 127-138.
    10. Hassan, M. Kabir & Chiaramonte, Laura & Dreassi, Alberto & Paltrinieri, Andrea & Piserà, Stefano, 2022. "The religious fringe of Corporate Social Responsibility," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 243-265.
    11. Ge Ge & Xiang Xiao & Zhenzhu Li & Qinghui Dai, 2022. "Does ESG Performance Promote High-Quality Development of Enterprises in China? The Mediating Role of Innovation Input," Sustainability, MDPI, vol. 14(7), pages 1-24, March.
    12. Bohyun Yoon & Jeong Hwan Lee & Ryan Byun, 2018. "Does ESG Performance Enhance Firm Value? Evidence from Korea," Sustainability, MDPI, vol. 10(10), pages 1-18, October.
    13. Jiří Hřebíček & Ondřej Popelka & Michael Štencl & Oldřich Trenz, 2012. "Corporate performance indicators for agriculture and food processing sector," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(4), pages 121-132.
    14. Semenova, Natalia, 2010. "Corporate Environmental Performance: Consistency of Metrics and Identification of Drivers," Sustainable Investment and Corporate Governance Working Papers 2010/9, Sustainable Investment Research Platform.
    15. Andrea Cardoni & Evgeniia Kiseleva & Simona Arduini & Simone Terzani, 2024. "From sustainable value to shareholder value: The impact of sustainable governance and anti‐corruption programs on market valuation," Business Strategy and the Environment, Wiley Blackwell, vol. 33(1), pages 19-42, January.
    16. Les Coleman, 2011. "Losses from Failure of Stakeholder Sensitive Processes: Financial Consequences for Large US Companies from Breakdowns in Product, Environmental, and Accounting Standards," Journal of Business Ethics, Springer, vol. 98(2), pages 247-258, January.
    17. Gabriel, Vítor, 2018. "Environmentally sustainable investment: Dynamics between global thematic indices," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    18. Kabir Hassan, M. & Chiaramonte, Laura & Dreassi, Alberto & Paltrinieri, Andrea & Piserà, Stefano, 2021. "The crossroads of ESG and religious screening on firm risk," Research in International Business and Finance, Elsevier, vol. 58(C).
    19. Laura Chiaramonte & Alberto Dreassi & Andrea Paltrinieri & Stefano Piserà, 2020. "Sustainability Practices and Stability in the Insurance Industry," Sustainability, MDPI, vol. 12(14), pages 1-25, July.
    20. Hassan, M. Kabir & Chiaramonte, Laura & Dreassi, Alberto & Paltrinieri, Andrea & Piserà, Stefano, 2023. "Equity costs and risks in emerging markets: Are ESG and Sharia principles complementary?," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:12:p:4940-:d:1411574. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.