This study explores China’s green credit policy from a credit risk perspective. Green finance has been growing rapidly in China since the government issued its Green Credit Policy. The objective of this study is to explore whether green loans are less risky than non-green loans. Based on a five-year dataset of 24 Chinese banks, we used panel regression techniques, including two-stage least square regression analysis and random-effect panel regression to examine whether a higher green credit ratio reduces a bank’s non-performing loan ratio (NPL ratio). The results suggest that allocating more green loans to the total loan portfolio does reduce a bank’s NPL ratio. We conclude that institutional pressure by the Chinese Green Credit Policy has a positive effect on both the environmental and the financial performance of banks. The study contributes to the literature on the correlation between green lending and credit risks, as well as to the literature on the impact of institutional pressure on environmental and financial risks.

This paper explores social finance as a strategy for generating social innovations and, at the same time, financial returns. It explores why risk assessment for social finance is so challenging and suggests three sources of difficulty: setting boundaries, integrating heterogeneous values, and responding with sufficient speed and flexibility to support innovation. It suggests links between the seemingly distinct challenges of social finance being able to maximize its impact at different stages of the innovation process in a complex socio-ecological system, whilst also acting as a reframing agent in terms of the understanding of the system itself at other stages. Finally, this paper develops a new concept ‘developmental impact investing’ as a modified version of a portfolio strategy that uses a range of projects both to manage risk and to generate new knowledge about the complex systems in which the social finance attempts to create impact and innovation.

Geobey, S., and K. A. McGowan. 2019. Panarchy, ontological and epistemological phenomena, and the Plague. Ecology and Society 24(4):23. https://doi.org/10.5751/ES-11089-240423

This study examines the impact of workforce practices on firms’ environmental and social performance. The mediating impact of firms’ financial performance and the moderating impact of firm age on workforce practices and environmental/social performance are also investigated. Data were collected through the Refinitiv database from a sample of 224 large, actively traded Canadian firms listed on the Toronto Stock Exchange (TSX). A linear regression model was used to test the effect of various workforce practices on firms’ environmental and social performance. The findings have important implications for the direct and indirect impacts of workforce practices on firms’ environmental and social performance. While the direct impact was found to be significant, firms’ financial performance was found to fully mediate the workforce-environment/social performance relationship. The findings also demonstrated that the impact of firm age on workforce practices and environmental/social performance via financial performance was significant. The study draws on the signaling theory to empirically investigate the contextual aspects that affect the association between various workforce practices and firms’ sustainability performance. The findings can be utilized by firms to select the right mix of practices to tailor workforce management and achieve better sustainability performance in their environmental and social initiatives.

This is a reflection upon a social innovation lab process used to establish and build an ongoing culture of sustainability (COS) within a new multi-tenant commercial office building. It seeks to answer two key questions: (1) what are the design tensions that emerge when constructing co-design processes meant to encourage social innovation in a complex system while working from inside that complex system; (2) in building commons governance structures in a complex system, what are realistic expectations for the voluntary participation when multiple organizations with different core mandates are involved? This paper’s primary results come from reflecting upon the COS development coming from the social innovation lab process and adaptations process needed for it to work within a place-based context. The COS intervention itself is still in process and was disrupted by COVID-19, so these findings are still preliminary. Participatory co-design research often involves a great deal of complexity and tacit knowledge, so the key finding here is the surfacing of four core sources of tension that arise when developing a co-design process for the management of a commons: the allocation of costs for co-ordinating collective action, balancing a homogeneous platform for action with heterogeneous participants, physical building infrastructure and social co-design approaches, and between-tenant organization leadership and co-design approaches. This paper’s key contribution is in clarifying core challenges that participatory process designers face when developing and implementing co-design processes.

The current ethos of most nonprofit boards of directors focuses on role clarity between board directors and the executive director. The board’s role is to collectively set strategic direction and provide oversight while leaving day-to-day operations to staff. Yet, many individual directors join a board to make an impact on the organization by addressing very specific operational concerns and/or to represent a stakeholder group, and this creates tension at the board table. This article explores whether there is necessarily a trade-off between the representative and good governance roles of a nonprofit board director. It will demonstrate that the tension between representing member interests and governing nonprofits is a false dichotomy. Reconciling these two interests offers some potential avenues for improved organizational accountability.