Banking on the Equator. Are Banks that Adopted the Equator Principles Different from Non-Adopters?

The Equator Principles are a series of principles by which financial institutions judge project finance lending so that the projects are socially responsible and environmentally sound. Now we all know what people generally think of "green stuff" in the brutal world of financial institutions and trading. So it is definitely worthwhile to ask, does it make a difference if a bank has adopted these principles? Well, according to this research article, it does! It is a very strong signal and as it so happens, the bank's shareholders love it, or at least, don't hate these principles!

Bert Scholtens and Lammertjan Dam, Banking on the Equator. Are Banks that Adopted the Equator Principles Different from Non-Adopters?, World Development, Volume 35, Issue 8, August 2007, Pages 1307-1328. (http://www.sciencedirect.com/science/article/B6VC6-4P3M2C2-1/2/130644d162a770d1a28f81bb5d37c6a3)
Abstract: Summary We analyze the performance of banks that adopted the Equator Principles. The Equator Principles are designed to assure sustainable development in project finance. The social, ethical, and environmental policies of the adopters differ significantly from those of banks that did not adopt the Equator Principles. They are also significantly larger. Most other bank characteristics do not show significant differences. Shareholders did not react negatively to the announcement of the adoption of the Equator Principles. We conclude that adoption of the Equator Principles is used to signal responsible conduct. Keywords: corporate social responsibility; project finance; banks; Equator Principles; financial performance; event study