Impact of Environmental, Social Governance (ESG) on Bank Group performance in India

With the objective to accomplish SDGs 8, 9, 12, 13, and 16, the
performance of 33 listed banks from various bank groups is analysed
with regard to ESG variables. The Environmental, Social, and
Governance performance ESG ratings individually and collectively
are taken into account in the study. Accounting measures like Return
on Assets (ROA), Return on Equity (ROE), and Tobin’s Q are used to
analyse financial performance.
According to research, there is a relation between ESG and financial
performance of banking instituions. The study emphasises the
profitability as the financial performance (FP) measure, and level of
ESG investment, ESG can have a different impact on FP. According to
the report, the size of ESG investments still have a beneficial impact
on market performance but no longer have a substantial impact on
Indian bank groups’ accounting performance. In order to maximise
their investments and generate optimal returns, the report advises
banks to pinpoint ESG as a tipping point