Lending Relationships of Firms for a Just Transition

Abstract

This paper examines lending dynamics for firms aiming for a “just transition”. Analyzing 37,426 firm‐year observations from DealScan and Refinitiv's environmental, social and governance (ESG) transition data (2002–2021), we find that lenders offer lower interest rates to firms with prior relationships and strong ESG commitments, particularly environmental ones. While environmental factors receive favourable treatment, economic and governance transitions are less prioritized. Lenders tend to form more dispersed syndicates when supporting firms focused on ESG transitions, especially environmental ones. This research highlights the uneven focus within ESG transitions and emphasizes the underexamined area of governance, providing insights into lending relationships.

Publication DOI: https://doi.org/10.1111/eufm.12535
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School
Aston University (General)
Additional Information: Copyright © 2024 John Wiley & Sons Ltd. This is the peer reviewed version of the following article: 'Saharti, M., Saeed, A., Chaudhry, S.M. and Nasir, M.A. (2024), Lending Relationships of Firms for a Just Transition. European Financial Management', which has been published in final form at https://doi.org/10.1111/eufm.12535. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archived Versions.
Uncontrolled Keywords: ESG,financing arrangement,interest rate,just transition,sustainability,Accounting,General Economics,Econometrics and Finance
Publication ISSN: 1468-036X
Last Modified: 26 Mar 2025 08:13
Date Deposited: 13 Jan 2025 16:41
Full Text Link:
Related URLs: https://onlinel ... 1111/eufm.12535 (Publisher URL)
http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2024-12-12
Published Online Date: 2024-12-12
Accepted Date: 2024-11-13
Authors: Saharti, Mohammed
Saeed, Asif
Chaudhry, Sajid M. (ORCID Profile 0000-0001-8769-8920)
Nasir, Muhammad Ali

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Version: Accepted Version

Access Restriction: Restricted to Repository staff only until 12 December 2026.

License: Creative Commons Attribution Non-commercial No Derivatives


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