The Role of Financial Institutions in ESG Policy in Europe

As financial institutions are under increasing pressure to finance green transformation in the European Union (EU), this book shows the real-life picture of their ESG activities, as well as their evolution.

In an era where sustainability has become a defining challenge for businesses and policymakers, the role of financial institutions in shaping Environmental, Social, and Governance (ESG) practices is more crucial than ever. As financial institutions are under increasing pressure to finance green transformation in the European Union (EU), this book shows the real-life picture of their ESG activities, as well as their evolution. It provides an in-depth exploration of the increasing role of ESG factors at both the macroeconomic and microeconomic levels and offers insights into how regulations, market forces, and corporate strategies influence sustainability reporting of financial institutions and their ESG-related actions in practice. It examines the evolution of ESG policies and corporate reporting. The book focuses on financial institutions as key drivers of sustainable transformation and analyses non-financial reports through advanced text-mining methodologies to identify thematic shifts over time and assess whether ESG reporting reflects genuine action or mere regulatory compliance. Further, it evaluates the engagement of banks and insurers in ESG activities to uncover whether they act as trendsetters or followers of governmental pro-ESG initiatives. A dedicated chapter explores the challenges of greenwashing, scrutinizing discrepancies between reported commitments and actual business practices. The authors analyse both the advantages and drawbacks of ESG policies implemented in Europe and offer insight into how to measure and rank both financial institutions and countries in terms of their ESG performance. This book is designed for researchers, scholars and financial professionals, interested in understanding the complexities of ESG implementation in the financial sector. Additionally, the book provides policymakers with the ability to identify gaps in the ESG frameworks and formulate relevant policy implications.