Bank loans and firm environmental information disclosure: Evidence from China's heavy polluters

We examine the impact of environmental information disclosure (EID) on heavy polluters' access to bank loans. Through a proprietary dataset of listed heavy polluters in China between 2011 and 2018, we find that the quality of EID positively contributes to their access to bank loans. Furthermore, banks rely more on EID in lending practice to heavy polluters in less-developed regions, with poor internal control, or with state ownership. Our findings support the effectiveness of EID in China's loan market and may have policy implications for the green management of heavy polluters in emerging markets.