The objective of this analysis is to verify the impact of environmental performance, social responsibility and corporate governance (ESG) on the performance of banks in MENASA countries. It aims to examine the relationship between the ESG score and its ESG pillars and the bank performance over the 2020–2023 periods.
This paper analyze 620 banking institutions in the 24 MENSA countries. Refinitiv database is used to identify ESG indicators and the accounting and market variables are used to identify performance indices. The panel data approach with generalized least squares estimates is used to measure the influence of ESG-Score and indicators on performance indices. The Tobin’s Q is used as an alternative dependent variable to check the robustness of our results.
The results indicate that independent variable (ESG-score) has a negatively influence on performance indices. Nevertheless, the results of the link between each ESG indices and performance are varied.
This investigation offers a specific analysis of ESG indicators in connection with bank performance. In effect, the outcomes will give academics and practitioners a useful set of ESG-based predictive indicators for improving bank performance.
This paper supplies environmental, social and governance information’s and policy implications for stakeholders concerned with the banking sector in MENASA countries. Therefore, banks have to ensure their ESG and performance to be profitable with these banks.
