This study examines sustainability commitment integration into financial performance within European financial institutions, using a panel data regression analysis across 280 listed banks from 30 European countries (2014–2023). Empirical findings reveal mixed relationships. While simple ESG disclosure does not significantly impact performance, higher ESG scores correlate with reduced financial results, suggesting increased operational costs associated with sustainability reporting. Interestingly, aligning with the MSCI ESG benchmark positively impacts ROE and ROA, indicating benefits from industry-leading sustainability practices. This research advances understanding of how sustainability considerations reshape investment decisions and risk assessments in banking.
Horobeţ et al. (Wed,) studied this question.
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