Title: Impacts of climate change exposure on bank performance in Northeast and Southeast Asia from 2010 to 2021: the moderating role of regulatory quality

Authors: Lan Luu; Huong Trang Kim; Ha Nguyen; Trang Hoang

Addresses: Faculty of Accounting and Auditing, Foreign Trade University, 91 Chua Lang, Lang Thuong Ward, Dong Da District, Hanoi, Vietnam ' Faculty of Banking and Finance, Foreign Trade University, 91 Chua Lang, Lang Thuong Ward, Dong Da District, Hanoi, Vietnam ' Faculty of Banking and Finance, Foreign Trade University, 91 Chua Lang, Lang Thuong Ward, Dong Da District, Hanoi, Vietnam ' School of Banking and Finance, National Economics University, 207 Giai Phong, Hai Ba Trung District, Hanoi, Vietnam

Abstract: This study investigates the relationship between climate change exposure and bank performance in the banking sector of Northeast and Southeast Asia. We assess firm-level climate change exposure by developing a specialised climate change dictionary, which is constructed by curating and integrating relevant keywords related to climate change. The frequency of these keywords within firm disclosures serves as a measure of the extent to which banks are exposed to climate-related opportunities, regulatory changes and physical risks. We observe that the positive impact of climate change regulatory and physical exposure on bank performance are more pronounced in high regulatory quality environment and after the implementation of the Paris Agreement. This study contributes to the understanding of how climate change exposure influences firms in the banking sector and highlights the importance of regulatory quality and implementation of Paris Agreement in facilitating positive impacts of exposure to climate change topics on these firms' performance.

Keywords: climate change exposure; bank performance; annual report; sustainability report; regulatory environment.

DOI: 10.1504/IJGE.2025.149731

International Journal of Green Economics, 2025 Vol.19 No.2, pp.109 - 140

Received: 31 Oct 2023
Accepted: 05 Dec 2024
Published online: 11 Nov 2025 *

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