Background The global commercial banking sector is under increasing pressure to integrate Corporate Social Responsibility (CSR) into its core strategies. This shift is driven by evolving regulatory frameworks, heightened stakeholder expectations, and a growing recognition of sustainability’s impact on long-term viability. However, empirical evidence on the CSR-financial performance (FP) relationship remains fragmented and often contradictory, creating a critical knowledge gap for practitioners and scholars alike. Methods This systematic literature review, conducted in accordance with PRISMA 2020 guidelines, synthesizes the most recent evidence (2022-2025). A comprehensive search of Scopus-indexed databases identified relevant studies. The review employed a convergent synthesis approach, integrating quantitative and qualitative findings through thematic analysis and effect size calculations. Study quality was appraised using a modified Newcastle-Ottawa Scale, with 85% of the included studies meeting high-quality thresholds. Results The synthesis indicates a predominantly positive, though context-dependent, association between CSR and financial performance. Meta-analytical findings show moderate positive correlations with key profitability indicators, including return on assets (r = 0.34) and return on equity (r = 0.29). A significant finding is CSR’s pronounced role in risk mitigation, evidenced by a negative correlation with non-performing loans (r = -0.26) and enhanced resilience during market volatility. The relationship is strongly moderated by institutional factors: bank size, regulatory environment, and geographic context. Crucially, the depth of strategic integration was a key differentiator, with substantive, authentic CSR implementations yielding significantly greater financial benefits than symbolic approaches. Conclusion This review provides a contemporary synthesis of the CSR-FP nexus in commercial banking, offering three principal contributions: it identifies key moderators that explain contradictory findings in prior literature; it documents risk mitigation as a fundamental mechanistic pathway linking CSR to financial outcomes. The findings offer evidence-based guidance for banking executives and policymakers to navigate the complex landscape of sustainable finance effectively.
Natukunda et al. (Thu,) studied this question.