Research on the Relationship between ESG Performance and Financial Performance of Commercial Banks in China

Xingyu Feng

doi:10.54097/mfgz5063

Authors

Xingyu Feng

DOI:

https://doi.org/10.54097/mfgz5063

Keywords:

ESG; Financial performance; Commercial Bank.

Abstract

With the proposal of China's dual carbon goals, environmental and sustainable development issues have received continuous attention from society. Environmental, social, and governance (ESG) performance is currently the mainstream framework for evaluating corporate sustainable development. This study aims to explore the relationship between ESG performance and financial performance of commercial banks. Based on the data from 42 listed commercial banks in China from 2017 to 2022, this study employs the OLS method to conduct correlation analysis and regression analysis. The study shows that there is a negative relationship between the current period's ESG performance and financial performance of listed commercial banks. In the long run, ESG performance has a positive impact on financial performance of listed commercial banks. This study can help Chinese listed commercial banks increase their investment in ESG and improve corporate governance.

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