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ABSTRACT This study investigates the bidirectional relationship between environmental, social, and governance (ESG) performance and financial‐based brand equity in the banking and financial services sector. Using a sample of 72 multinational financial institutions over the period 2009–2024, the study employs a simultaneous‐equations framework estimated by the three‐stage least squares (3SLS). The findings reveal that ESG performance has a significant and positive effect on financial‐based brand equity, and this effect is consistently observed across all ESG dimensions. In contrast, there is no robust evidence that stronger brand equity enhances firms' ESG performance. These results remain robust across alternative model specifications. Although prior studies have examined the links between sustainability and firm value, this study is among the first to provide empirical evidence on the asymmetric relationship between ESG performance and financial‐based brand equity in the banking sector. The findings highlight the role of ESG investment as a strategic intangible asset rather than a mere by‐product of branding.
Đạt et al. (Mon,) studied this question.