@phdthesis { , title = {A critical study of the role of Chinese banks in sustainable development: The adoption of the equator principles}, abstract = {Sustainable development has received increasing attention since the global financial crisis in 2008. Banks play a critical and active role in sustainable development mainly because of their intermediary role. Banks are recently under huge pressure from stakeholders for better corporate behaviours and sustainable development. While the last decade has increasingly seen the changing of banks’ corporate behaviour towards sustainable development, there is little empirical evidence on the engagement of banks in sustainable development programmes and participation in the Equator Principles (EPs), especially in the context of emerging economies. The EPs are a risk management framework, adopted by major financial institutions in the world, with a view to determining, assessing and managing environmental and social risk in project finance. The EPs are primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making of financial institutions. So far only five non-state-owned banks in China have adopted the EPs. This study aims to critically identify institutional factors influencing banks’ sustainable development and the adoption of the EPs in the case of China where the economy has been increasingly integrated with the global economy. This study has five research objectives, including 1) To understand the role of banks in CSR and sustainable development by reviewing the existing literature. 2) To comprehend the development of the EPs and its significance in promoting sustainability. 3) To appreciate the current state of Chinese banks’ sustainable development and adoption of the EPs. 4) To identify institutional factors that influence the decision-making of Chinese banks with regards to the adoption of the EPs and sustainable development. 5) To present some recommendations to China’s policymakers and bank managers on the EPs and sustainable development. More specifically, this study sets to study why and how Chinese commercial banks began to address CSR, sustainable development issues in their corporate strategy and how this was influenced by the institutional setting, but few banks adopted the EPs. This study attempts to find out the reasons behind the adoption of the EPs by Chinese banks through case studies and interviews. The methodology of this research is related to interpretivism with the use of a qualitative approach by employing case studies and interviews for data collection. Specifically, this study employs a qualitative multiple case study design and in-depth interviews, as this allows complex social and business management topics such as CSR, sustainable development and the adoption of the EPs with a focus on banks in sustainable development to be addressed and to grasp the non- or adoption of the EPs and bank sustainability. Field studies with seven banks (i.e., three EPs adopting and four non-adopting banks) employed semi-structured and thematically focused interviews, supported by desk-top studies of related documents and published reports. The study’s qualitative design targets subjective perceptions and attributions of the case banks and individuals who have knowledge and experience in the subject studied. Case banks selection was based on the banks’ adoption of the EPs in the context of China’s commercial banks. The 15 interviewees were from seven Chinese banks. Among the seven banks, three have adopted the EPs (i.e., Industrial Bank Co. Ltd., Jiangsu Bank, and Bank of Huzhou) and four are non-adopting banks. The study has achieved its overall aim and intended research objectives. A theoretical conclusion from this study is that institutional theory, emphasising legitimacy-granting activities by business organisations, probably offers the best explanation in the context of China’s banking sustainable development and the adoption of the EPs. This study highlights the capacity for institutional theory to render an in-depth understanding of the engagement of CSR and sustainable development concepts of Chinese banks associated with the adoption and implementation of the EPs by five non-state-owned banks. Although the fact of requiring the adoption of the EPs could be characterised as a form of coercive power (consisting of external pressures, organisational internal factors such as governance, risk management, seeking learning opportunities, reputation building, resources etc.), recent development in institutional theory help to explore the extent to which the adoption and non-adoption are shaped by the government, banks, customers, the interests of actors involved in the adoption process, and the role of senior managers of banks in promoting the sustainable development and the adoption of the EPs. However, it should be noted that other theoretical perspectives such as stakeholder theory, political economics and culture influence provide useful insights as well and each of them highlights certain aspects of the sustainable development and the EPs (non-)adoption among Chinese banks. Thus, this study suggests that with a view to developing a full understanding of Chinese banks’ adoption of the EPs recognising the complementarity of various theoretical perspectives is therefore essential as different environments and social-economic factors influence the adoption and implementation. The main findings of this study include: 1) Five non-state-owned banks have adopted the EPs, but none of the state-owned banks has adopted the EPs. 2) Chinese banks’ sustainable development has been largely guided by the authorities and political attributes involved in CSR should be considered extensively in discussing Chinese banks’ CSR and sustainable development. 3) Chinese culture has influenced the behaviours of Chinese banks towards sustainable development. 4) Institutional factors that influence the decision-making of Chinese banks with regards to the adoption of the EPs and sustainable development can be categorised into the external environment, organisational internal environment, resources environment and clients/project borrowers’ environment. 5) The adoption of the EPs by Chinese banks has largely been determined by institutional factors. 6) Chinese banks’ sustainable development and adoption of the EPs are motivated by political inspirations. 7) The motivations of learning and developing links with financial institutions have driven senior managers of banks to adopt the EPs. A theoretical conclusion from this study is that institutional theory probably offers the best explanation in the context of China’s banking sustainable development and the adoption of EPs. This study highlights the capacity for institutional theory to render an in-depth understanding of the engagement of CSR and sustainable development concepts of Chinese banks associated with the adoption and implementation of the EPs by five non-state-owned banks. However, other theoretical perspectives such as stakeholder theory, political economics and culture influence provide useful insights as well and each of them highlights certain aspects of the sustainable development and the EPs (non-)adoption among Chinese banks. This study has outlined a number of policy and practical implications to banking regulators, management and stakeholders.}, doi = {10.17869/ENU.2022.2948324}, publicationstatus = {Unpublished}, url = {http://researchrepository.napier.ac.uk/Output/2948324}, author = {Guo, Shimin} }