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Journal of Business Ethics

, Volume 127, Issue 2, pp 283–296 | Cite as

Developing a Sustainability Credit Score System

  • Rodrigo ZeidanEmail author
  • Claudio Boechat
  • Angela Fleury
Article

Abstract

Within the banking community, the argument about sustainability and profitability tends to be inversely related. Our research suggests this does not need to be strictly the case. We present a credit score system based on sustainability issues, which is used as criteria to improve financial institutions’ lending policies. The Sustainability Credit Score System (SCSS) is based on the analytic hierarchy process methodology. Its first implementation is on the agricultural industry in Brazil. Three different firm development paths are identified: business as usual, sustainable business, and future sustainable business. The following six dimensions are present in the SCSS: economic growth, environmental protection, social progress, socio-economic development, eco-efficiency, and socio-environmental development. The results suggest that sustainability is not inversely related to profit either from a short- or long-term perspective. The SCSS is related to the Equator Principles, but its application is not driven to project financing. It also deals with short- and long-term risks and opportunities, instead of short-term sustainability impacts.

Keywords

Sustainability Risk management Lending policies Equator Principles Banking industry Management practices Corporate social responsibility 

Notes

Acknowledgments

We are grateful to the Editor and three anonymous referees for providing us with helpful comments. We would also like to thank Heiko Spitzeck, Jay Rubin, and participants at the ECCE-USB Conference 2013.

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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Rodrigo Zeidan
    • 1
    • 2
    Email author
  • Claudio Boechat
    • 3
  • Angela Fleury
    • 3
  1. 1.Fundação Dom Cabral and Nottingham University Business School ChinaNova LimaBrazil
  2. 2.Rio de JaneiroBrazil
  3. 3.Fundação Dom CabralNova LimaBrazil

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