Perceived ESG disclosure and credit decision-making orientation: The mediating role of intention to use sustainability information in an emerging market

Abstract

Type of the article: Research ArticleAbstractIntegrating environmental, social, and governance factors into the credit granting process is an imperative requirement for financial risk management. This study aims to quantify the impact of the perceived corporate environmental, social, and governance (ESG) information disclosure on Credit Decision-Making Orientation and determine the mediating role of the intention to use sustainability information. Research data were collected through a survey of 235 credit officers and managers at 32 commercial banks in Vietnam from February to August 2024 and subsequently analyzed utilizing partial least squares structural equation modeling. The empirical results indicate that the disclosure levels of environmental, social, and governance information do not have a direct impact on credit decision-making orientation. However, these three factors positively affect the intention to use sustainability information, wherein the environmental factor exerts the most substantial influence (β = 0.447), followed by governance (β = 0.416) and social factors (β = 0.363). Furthermore, the intention to use sustainability information acts as a full mediator, exerting a strong positive impact on credit decision-making orientation (β = 0.558) and explaining 26.2% of the variance in the dependent variable. The study concludes that subjective credit appraisal orientations among banking personnel are primarily driven by their cognitive intention to integrate sustainability data rather than the mere presence of corporate disclosures.