Adaptation of Banks to Sustainability Requirements and Impact on Their Financial Performance
At the banking system level, the implementation of sustainability requirements is an important goal in order to ensure long-term financial performance. Transparency of information included in banks' sustainability reports can be assessed through methodologies based on environmental impact cr...
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| Format: | Article |
| Language: | English |
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Editura ASE
2025-08-01
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| Series: | Amfiteatru Economic |
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| Online Access: | https://www.amfiteatrueconomic.ro/temp/Article_3443.pdf |
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| _version_ | 1849244159628541952 |
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| author | Mariana Bunea Camelia-Daniela Hategan Rodica Gabriela Blidisel Adrian Doru Bigioi |
| author_facet | Mariana Bunea Camelia-Daniela Hategan Rodica Gabriela Blidisel Adrian Doru Bigioi |
| author_sort | Mariana Bunea |
| collection | DOAJ |
| description | At the banking system level, the implementation of sustainability requirements is an
important goal in order to ensure long-term financial performance. Transparency of
information included in banks' sustainability reports can be assessed through methodologies
based on environmental impact criteria, governance, and social aspects (ESG). A high score
on the impact criteria can bring benefits to the level of banks, but at the same time, the
adoption of sustainability policies can increase operational costs. In this context, the objective
of this research is to identify the correlation between a series of indicators that measure the
performance of ESG and the financial performance of banks. The research is based on the
econometric analysis applied to a sample of 76 banks in Europe for the period 2020-2023.
Information was collected from the LSEG Refinitiv Eikon database, using financial
indicators and ESG scores reported by banks, thus ensuring a relevant benchmarking
analysis. The results obtained indicate a significant relationship between the financial
performance of European banks and the factors of ESG, highlighting a negative correlation
between the return on assets (ROA) and the governance score (G), as well as a positive
influence of the ESG score on the return on equity (ROE). This research highlights how ESG
factors influence the financial performance of European banks and their climate risk
management strategies. It provides essential information for policymakers, investors, and
regulators looking to integrate sustainability into banking practices |
| format | Article |
| id | doaj-art-5aff58139ac8404cb78745dd8b7a9c7c |
| institution | Kabale University |
| issn | 1582-9146 2247-9104 |
| language | English |
| publishDate | 2025-08-01 |
| publisher | Editura ASE |
| record_format | Article |
| series | Amfiteatru Economic |
| spelling | doaj-art-5aff58139ac8404cb78745dd8b7a9c7c2025-08-20T03:59:16ZengEditura ASEAmfiteatru Economic1582-91462247-91042025-08-012770771 78710.24818/EA/2025/70/771Adaptation of Banks to Sustainability Requirements and Impact on Their Financial PerformanceMariana Bunea0https://orcid.org/0000-0003-2879-2065Camelia-Daniela Hategan1https://orcid.org/0000-0002-3675-4432 Rodica Gabriela Blidisel2https://orcid.org/0000-0001-7918-5105 Adrian Doru Bigioi3https://orcid.org/0009-0005-4084-5731The Bucharest University of Economic Studies, RomaniaWest University of Timișoara, Timișoara, RomaniaWest University of Timișoara, Timișoara, RomaniaBucharest University of Economic Studies, Romania At the banking system level, the implementation of sustainability requirements is an important goal in order to ensure long-term financial performance. Transparency of information included in banks' sustainability reports can be assessed through methodologies based on environmental impact criteria, governance, and social aspects (ESG). A high score on the impact criteria can bring benefits to the level of banks, but at the same time, the adoption of sustainability policies can increase operational costs. In this context, the objective of this research is to identify the correlation between a series of indicators that measure the performance of ESG and the financial performance of banks. The research is based on the econometric analysis applied to a sample of 76 banks in Europe for the period 2020-2023. Information was collected from the LSEG Refinitiv Eikon database, using financial indicators and ESG scores reported by banks, thus ensuring a relevant benchmarking analysis. The results obtained indicate a significant relationship between the financial performance of European banks and the factors of ESG, highlighting a negative correlation between the return on assets (ROA) and the governance score (G), as well as a positive influence of the ESG score on the return on equity (ROE). This research highlights how ESG factors influence the financial performance of European banks and their climate risk management strategies. It provides essential information for policymakers, investors, and regulators looking to integrate sustainability into banking practices https://www.amfiteatrueconomic.ro/temp/Article_3443.pdfperformancebankssustainabilityesg scoresreporting |
| spellingShingle | Mariana Bunea Camelia-Daniela Hategan Rodica Gabriela Blidisel Adrian Doru Bigioi Adaptation of Banks to Sustainability Requirements and Impact on Their Financial Performance Amfiteatru Economic performance banks sustainability esg scores reporting |
| title | Adaptation of Banks to Sustainability Requirements and Impact on Their Financial Performance |
| title_full | Adaptation of Banks to Sustainability Requirements and Impact on Their Financial Performance |
| title_fullStr | Adaptation of Banks to Sustainability Requirements and Impact on Their Financial Performance |
| title_full_unstemmed | Adaptation of Banks to Sustainability Requirements and Impact on Their Financial Performance |
| title_short | Adaptation of Banks to Sustainability Requirements and Impact on Their Financial Performance |
| title_sort | adaptation of banks to sustainability requirements and impact on their financial performance |
| topic | performance banks sustainability esg scores reporting |
| url | https://www.amfiteatrueconomic.ro/temp/Article_3443.pdf |
| work_keys_str_mv | AT marianabunea adaptationofbankstosustainabilityrequirementsandimpactontheirfinancialperformance AT cameliadanielahategan adaptationofbankstosustainabilityrequirementsandimpactontheirfinancialperformance AT rodicagabrielablidisel adaptationofbankstosustainabilityrequirementsandimpactontheirfinancialperformance AT adriandorubigioi adaptationofbankstosustainabilityrequirementsandimpactontheirfinancialperformance |