Steering the energy transition: Governance and renewable energy in global banking

Abstract

In response to the growing urgency of climate change, renewable energy adoption has become a central component of corporate environmental strategies. While academic literature has examined this issue across various sectors, limited attention has been paid to service industries such as banking, particularly with regard to their own operational energy practices. This study addresses this gap by investigating the role of corporate governance in influencing renewable energy adoption in the banking sector. Grounded in the resource dependence theory, the analysis focuses on four board attributes: board size, board independence, board gender diversity, and the presence of a CSR committee. Using a panel dataset of 3601 observations from 665 listed global banks over the period 2016–2023, and employing a fixed-effects regression model, this study explores how these internal governance mechanisms affect the extent to which banks integrate renewable sources into their energy mix. The results reveal that board gender diversity and the presence of a CSR committee are positively associated with renewable energy adoption, whereas board size is negatively related. Board independence does not show a statistically significant effect. This study adds to the body of research on renewable energy adoption by focusing on the underexplored context of banking, extends the debate on the governance-sustainability nexus by addressing energy transition strategies, and broadens the application of resource dependence theory to the domain of environmental management within financial institutions.