Is ESG disclosure associated with bank performance? Evidence from the Visegrad Four countries

Lamanda, Gabriella; Tamásné Vőneki, Zsuzsanna

doi:10.1108/meq-02-2023-0064

Cited by 5 publications

References 69 publications

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Do private and public sector banks respond to ESG in the same way? Some evidences from India

Jaiwani,

Gopalkrishnan

2023

BIJ

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PurposeThe banking industry faces increasing scrutiny from stakeholders regarding its environmental and social impacts, given its crucial role in fostering economic growth. Banks have been encouraged to adopt environmental, social and governance (ESG) practices to mitigate risks and safeguard their reputation. However, the effectiveness of ESG sensitivity within the banking industry is contingent upon ownership and structural factors. The extent to which banks can integrate ESG considerations into their operations and decision-making processes may vary based on their ownership structures. Therefore, this study aims to examine if the impact of ESG on the performance of Indian banks varies between private and public sector banks.Design/methodology/approachThe study employs six years of panel data from two separate samples of 12 private sector banks and 10 public sector banks in India. It utilises fixed and random effect estimation techniques with robust standard errors to derive accurate and reliable econometric results.FindingsThe main findings of this study reveal intriguing insights into the relationship between ESG factors and bank performance, considering the influence of ownership structure. For private sector banks, the ESG composite score, particularly the social dimension, negatively impacts financial performance. However, there is a contrasting positive effect on efficiency. In contrast, public sector banks demonstrate a positive and significant association between the environmental score and return on equity and non-performing assets.Practical implicationsThe findings highlight the need for tailored strategies that align with ownership structure to achieve sustainable financial and societal outcomes in the banking industry. Furthermore, it emphasises the need for private-sector banks to streamline their ESG initiatives, especially in the social dimension, to mitigate negative impacts on their financial performance.Originality/valueThis study introduces a novel dimension by addressing the “one size fits all” bias in prior research that overlooked bank ownership differences when examining the impact of ESG factors on bank performance.

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Do private and public sector banks respond to ESG in the same way? Some evidences from India

Jaiwani,

Gopalkrishnan

2023

BIJ

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Does diversity in top management and boards affect ESG performance? Evidence from Islamic and conventional banks in the MENA region

Rabbani,

Kiran,

Bhuiyan

et al. 2024

IMEFM

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Purpose This study aims to investigate the impact of gender diversity in top management teams and boards on environmental, social and governance (ESG) performance. The authors propose a corporate social responsibility (CSR) committee as a moderating variable in this relationship, drawing on resource dependence and legitimacy theories. This study is crucial in understanding the dynamics of gender diversity and its impact on ESG performance in the banking sector. Design/methodology/approach The study examines a sample of Islamic and conventional banks from 10 Middle Eastern and North African countries during 2008–2022. Initial analysis was conducted using fixed effects panel regression, whereas the robustness test used the generalized method of movement dynamic system. Findings The findings, which are significant for both conventional and Islamic banks, indicate that female directors are crucial in promoting ESG performance in conventional banks. In contrast, female executives do not appear to contribute significantly. However, for Islamic banks, neither board nor executive gender diversity significantly affects ESG performance. Moreover, the find that the positive moderating role of the CSR committee is significant only for the nexus between board gender diversity and conventional banks’ ESG performance and for the connection between executive gender diversity and Islamic banks’ ESG performance. Originality/value Despite the widespread belief that gender diversity in top management teams is pivotal in promoting ESG performance, empirical studies supporting these claims are scarce, particularly in the banking sector. The study, therefore, brings a novel perspective to this discourse. These findings have the potential to significantly assist stakeholders in evaluating how gender diversity in top management teams influences banks’ sustainability practices, thereby empowering them to make more informed and impactful investment decisions.

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Is sustainability reporting a way forward? Evidence from banking industry

Gupta

2024

MEDAR

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Purpose This paper aims to examine the influence of sustainability reporting on bank performance. Furthermore, this study investigates the impact of the country’s economic development, financial system and crisis in moderating sustainability reporting and bank performance relationship. Design/methodology/approach The sample consists of 400 listed banks from 19 countries over the 2009–2022 period. Panel fixed-effect regression is applied, and System Generalized Method of Moments is used as robustness to address endogeneity concerns. The results are robust and survive several sensitivity tests. Findings The results, aligning with legitimacy and agency theories, suggest a negative relationship between sustainability reporting and bank performance. Based on further classifications, results suggest the negative (positive) impact of country’s financial system (economic development) in moderating the sustainability reporting and bank performance nexus. Finally, this study documents the positive influence of sustainability reporting on bank performance during the crisis period. Overall, the findings fail to support the reduced information asymmetry accruing from higher sustainability disclosures in developing and bank-based economies. Practical implications This study has important implications for regulators, policymakers and other stakeholders, especially in light of recent banking scandals that have deteriorated stakeholders' faith in financial institutions' reporting quality. Originality/value This study extends the scant literature on sustainability reporting in banking from a cost-benefit vantage point. Furthermore, to the best of the author’s knowledge, no previous research has examined the moderating role of the country’s financial structure and crisis in sustainability reporting and bank performance relationship.

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Is ESG disclosure associated with bank performance? Evidence from the Visegrad Four countries

Cited by 5 publications

References 69 publications

Do private and public sector banks respond to ESG in the same way? Some evidences from India

Do private and public sector banks respond to ESG in the same way? Some evidences from India

Does diversity in top management and boards affect ESG performance? Evidence from Islamic and conventional banks in the MENA region

Is sustainability reporting a way forward? Evidence from banking industry

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