Background and Motivation
Amid mounting global concerns over sustainability, financial stability, and rapid technological transformation, banks in emerging markets face growing pressure to adapt. For the BRICS economies—Brazil, Russia, India, China, and South Africa—this pressure is especially acute, given their outsized role in the world economy and unique socio-economic challenges. As these nations strive for economic growth, they also confront environmental degradation, social inequality, and regulatory gaps, all of which intensify the urgency to embed Environmental, Social, and Governance (ESG) criteria and technological innovation into financial practices. China Finance Review International (CFRI) brings you a new article titled “ ESG lending, technology investment and banking performance in BRICS: navigating sustainability and financial stability ”, which examines how sustainable finance and digital transformation are reshaping the region’s banking sector by analysing their effects on bank risk and profitability.
Methodology and Scope
The study leverages quarterly panel data from commercial banks in BRICS countries between 2015 and 2023. Using fixed-effects regression models, the authors estimate how banks’ exposure to high-ESG firms and their borrowers’ technology-related capital expenditures impact two key metrics: return on risk-weighted assets (RoRWA) and non-performing loans (NPLs). To ensure robust findings, the analysis is further stratified by bank size, assessing whether institutional scale influences the efficacy of ESG and technology-driven lending strategies.
Key Findings and Contributions
Why It Matters
This research directly addresses the dual mandate facing BRICS banks: promoting sustainable economic growth while safeguarding financial system stability. As emerging markets drive a significant share of global growth, how their banks manage ESG and technological risks will shape not only local economies but also international financial flows and climate action. The study’s novel findings offer timely, actionable guidance for banks and policymakers as they navigate the intersection of sustainability, digitalisation, and risk management.
Practical Applications
Discover high-quality academic insights in finance from this article published in China Finance Review International . Click the DOI below to read the full-text original! Open access for a limited time!
China Finance Review International
News article
ESG lending, technology investment and banking performance in BRICS: navigating sustainability and financial stability
5-Jun-2025