An International Research on the Relationship between Environmental, Social and Corporate Governance (ESG) and Bank Profitability within Sustainable Finance

Year 2023, , 1236 - 1263, 25.11.2023

Zühal Arslan , Gamze Göçmen Yağcılar

https://doi.org/10.21076/vizyoner.1218886

Abstract

The aim of the study is to examine the effects of the ESG score, Combined ESG score, ESG discussion score, ESG social score, ESG corporate governance score and ESG environmental score, which are the components of the performance obtained from the environmental, social and corporate governance (ESG) activities of banks, on their asset and return on equity. For this purpose, between 2010-2019, 63 banks from 25 countries are included in the study. As a result of the analysis, it is seen that the ESG corporate governance score positively affects the bank's return on assets, while the ESG, ESG social and ESG environmental scores negatively affect the bank's return on assets. In addition, it is revealed that there is a negative relationship between the bank's return on equity and the ESG social score. It is expected that the findings obtained within the scope of the research will be guiding for many segments. The findings are illuminating on the gains and costs of banks to support responsible and sustainable finance. It also reveals that public and private sector enterprises should consider the relationship of ESG components with financial performance in the stages of capital budgeting and valuation of investments. On the other hand, it is expected to guide regulatory and supervisory institutions in determining and promoting ESG practices that will increase capital efficiency and reduce corporate finance costs. It is thought that while integrating sustainability principles into their investment processes, institutional and individual investors will help them understand the effects of ESG components on portfolio performance in portfolios to be created with socially responsible companies.

Keywords

Sustainable Finance, Environmental, Social and Corporate Governance (ESG), Bank Profitability, Panel Data Analysis

Sürdürülebilir Finans Kapsamında Çevresel, Sosyal ve Kurumsal Yönetim (ESG) ile Banka Karlılığı Arasındaki İlişki Üzerine Uluslararası Bir Araştırma

Abstract

Bu çalışmanın amacı, bankaların çevresel, sosyal ve kurumsal yönetim (ESG) faaliyetlerinden elde edilen performanslarının bileşenleri olan ESG skoru, Kombine ESG skoru, ESG tartışma skoru, ESG sosyal skoru, ESG kurumsal yönetim skoru ve ESG çevresel skorunun aktif ve özsermaye karlılıklarına etkisini incelemektir. Bu amaçla 2010-2019 yılları arasında 25 ülkeden 63 banka kapsama alınmıştır. Yapılan analizler sonucunda ESG kurumsal yönetim skorunun banka aktif karlılığını pozitif; ESG, ESG sosyal ve ESG çevresel skorunun aktif karlılığı negatif yönde etkilediği tespit edilmiştir. Ayrıca banka özsermaye karlılığı ile ESG sosyal skoru arasında negatif yönlü ilişki olduğu ortaya çıkmıştır. Araştırma kapsamında elde edilen bulguların pek çok kesim için yol gösterici olması beklenmektedir. Bulgular bankaların sorumlu ve sürdürülebilir finansmanı destekleme noktasında ortaya çıkan kazanç ve maliyetler konusunda aydınlatıcı olmaktadır. Ayrıca kamu ve özel sektör işletmelerinin sermaye bütçelemesi ve yatırımların değerlemesi aşamalarında ESG bileşenlerinin de finansal performans ile ilişkisini gözetmeleri gerektiğini ortaya koymaktadır. Diğer taraftan düzenleyici ve denetleyici kuruluşlara sermaye verimliliğini arttıracak ve kurumsal finansman maliyetlerini düşürecek ESG uygulamalarının belirlenmesi ve teşviki ile ilgili düzenleme ve yönergelerin oluşturulmasında yol gösterici olması beklenmektedir. Kurumsal ve bireysel yatırımcıların ise sürdürülebilirlik ilkelerini yatırım süreçlerine entegre ederken sosyal sorumlu firmalarla oluşturulacak portföylerde ESG bileşenlerinin portföy performansı üzerindeki etkilerini anlamalarına yardımcı olacağı düşünülmektedir.

Keywords

Sürdürülebilir Finans, Çevresel, Sosyal ve Kurumsal Yönetim (ESG), Banka Karlılığı, Panel Veri Analizi

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