The impact of ESG sustainability scores on the firms access to bank loans

This thesis investigates the impact of ESGperformance score of the companies in their ability to access loans from banks. The data used in this analysis is based on 4828 deals lent to 1645 US companies during the period of 2006-2016. For the accuracy of the results, the data was separated into the strength and concern factors based on each variable. They indicate whether the company has reported positive or negative performancefor each E, S and Gfactors respectively. The extended regression analysis of the paper concludes that banks are more likely to give larger loans to the companies withhigher strength scores, rather than those with lower strength scores. Furthermore, in terms of interest spreads charged on the loans,itwas revealed that the bad performingcompanies in terms of social concern scores are more likely to be charged higher prices on their debts.For E and G factors a weak evidence of this relationship was found as well.