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The city never sleeps: but when will investment banks wake up to the climate crisis?

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  • Theodor F. Cojoianu
  • Andrea G. F. Hoepner
  • Fabiola I. Schneider
  • Michael Urban
  • Anh Vu
  • Dariusz Wójcik

Abstract

Using a global dataset of over 840,000 equity, bond and syndicated loan investment banking deals, we build the fossil fuel investment brokerage profile of financial centres worldwide between 2000 and 2018. We also study whether city-level fossil fuel divestment commitments and country-level green banking policies impact the profile of fossil fuel financial centres over our study timeframe. We find that several financial centres shift their fossil fuel investment brokerage profiles substantially, including the asset classes in which they are active. However, we do not find any evidence that this is driven by city-level divestment commitments. In contrast, we find that fossil fuel investment banking brokers situated in financial centres exposed to voluntary green banking policies reduce their fossil fuel financing. This is driven by foreign brokers whose behaviour appears to signal an anticipation of forthcoming mandatory green finance policies.

Suggested Citation

  • Theodor F. Cojoianu & Andrea G. F. Hoepner & Fabiola I. Schneider & Michael Urban & Anh Vu & Dariusz Wójcik, 2023. "The city never sleeps: but when will investment banks wake up to the climate crisis?," Regional Studies, Taylor & Francis Journals, vol. 57(2), pages 268-286, February.
    • Handle: RePEc:taf:regstd:v:57:y:2023:i:2:p:268-286
    DOI: 10.1080/00343404.2021.1995601
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    Cited by:

    1. Michael Grote & Dariusz Wojcik & Matthew Zook, 2024. "Sticky substance with sticky power: Oil in global production and financial networks," Environment and Planning A, , vol. 56(2), pages 436-453, March.
    2. Galletta, Simona & Mazzù, Sebastiano & Naciti, Valeria & Paltrinieri, Andrea, 2024. "A PRISMA systematic review of greenwashing in the banking industry: A call for action," Research in International Business and Finance, Elsevier, vol. 69(C).
    3. J. Rickman & M. Falkenberg & S. Kothari & F. Larosa & M. Grubb & N. Ameli, 2024. "The challenge of phasing-out fossil fuel finance in the banking sector," Nature Communications, Nature, vol. 15(1), pages 1-12, December.

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