Evaluating ESG disclosures of Islamic banks: evidence from the Organization of Islamic Cooperation Members

This study considers the level of environment, social and governance (ESG) disclosures in the Islamic banks listed on the Organization of Islamic Cooperation Members stock Exchange and investigates the relationship between ESG disclosures and banks' financial (ROE), operational (ROA) and market performance (TQ). We examine 59 banks for 10 years (2007-2016), ends up with 561 observations. The results of regression models found significant positive impact of ESG on operational, financial and market performance. However, the relationship between performance and these disclosures is varying if measured individually; the environmental disclosure found positively affect the ROA and TQ. Whereas, the corporate social responsibility disclosure is negatively affect the three models (ROA, ROE and TQ). Last but not the least, the corporate governance disclosure found negatively affects the financial and operational performance. However, positively affect the TQ.