Publicação
Impact of ESG on Corporate Financial Performance in the European banking sector
| Resumo: | The purpose of this thesis is to investigate the impact of ESG (Environmental, Social, Governance) factors, both collectively and individually, on Corporate Financial Performance (CFP) in the European banking sector. It aims to determine whether adopting ESG strategies offers financial advantages. Sustainability has become a highly debated topic over the past decade, with increasing public pressure pushing companies to adopt ESG practices. Today, a successful bank is one that combines strong financial performance with a commitment to environmental and social responsibilities. This study analyzed twenty-nine papers to understand the current state of research on this topic. Econometric models, specifically panel regression models, were used to analyze the data, with return on assets (ROA) and return on equity (ROE) serving as the dependent variables. The models also included control variables with specific information for each bank, macroeconomic data from different European countries, and the variables of interest. The results were mixed: the overall ESG score, the combined ESG score (ESGC), and the Governance pillar positively impacted both ROA and ROE. The Social pillar had no impact on ROA but showed a significant positive impact on ROE, while the Environmental pillar showed no relation to either ROA or ROE. Overall, these findings suggest that adopting ESG practices can be advantageous for a bank’s financial performance, alongside other benefits. |
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| Autores principais: | Monteiro, António José Amaro Ferreira da Rocha |
| Assunto: | ESG Corporate Financial Performance Environmental Corporate Social Responsibility Corporate Governance Sustainable Finance SDG 1 - No poverty SDG 5 - Gender equality SDG 7 - Affordable and clean energy SDG 8 - Decent work and economic growth SDG 10 - Reduced inequalities SDG 11 - Sustainable cities and communities SDG 12 - Responsible production and consumption SDG 13 - Climate action SDG 16 - Peace, justice and strong institutions |
| Ano: | 2024 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade Nova de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório Institucional da UNL |
| Resumo: | The purpose of this thesis is to investigate the impact of ESG (Environmental, Social, Governance) factors, both collectively and individually, on Corporate Financial Performance (CFP) in the European banking sector. It aims to determine whether adopting ESG strategies offers financial advantages. Sustainability has become a highly debated topic over the past decade, with increasing public pressure pushing companies to adopt ESG practices. Today, a successful bank is one that combines strong financial performance with a commitment to environmental and social responsibilities. This study analyzed twenty-nine papers to understand the current state of research on this topic. Econometric models, specifically panel regression models, were used to analyze the data, with return on assets (ROA) and return on equity (ROE) serving as the dependent variables. The models also included control variables with specific information for each bank, macroeconomic data from different European countries, and the variables of interest. The results were mixed: the overall ESG score, the combined ESG score (ESGC), and the Governance pillar positively impacted both ROA and ROE. The Social pillar had no impact on ROA but showed a significant positive impact on ROE, while the Environmental pillar showed no relation to either ROA or ROE. Overall, these findings suggest that adopting ESG practices can be advantageous for a bank’s financial performance, alongside other benefits. |
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