Corporate Sustainability in Bangladeshi Banks: Proactive or Reactive Ethical Behavior?

Olaf Weber and Rezaul Karim Chowdury
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Olaf Weber: School of Environment, Enterprise and Development, University of Waterloo, Waterloo, ON N2L 3G1, Canada
Rezaul Karim Chowdury: School of Environment, Enterprise and Development, University of Waterloo, Waterloo, ON N2L 3G1, Canada

Sustainability, 2020, vol. 12, issue 19, 1-18

Abstract: The purpose of this study is to analyze the connection between the sustainability performance and financial performance of Bangladeshi banks to explore the impact of the Bangladesh Environmental Risk Management Guideline. We analyzed all 56 scheduled commercial banks that are currently operating in Bangladesh under the guidelines of the Central Bank of Bangladesh. Data for the sample has been collected from publicly available reports such as annual, sustainability, and corporate social responsibility (CSR) reports, disclosed sustainability and financial information on the banks’ websites, including all bank branches, and data published from the Central Bank. Data has been analyzed using panel regression. Our results indicate that higher sustainability performance creates a higher financial performance, and that bigger banks perform better with regard to sustainability than smaller banks. The analysis did not find, however, that higher financial performance influences the sustainability performance of the banks positively. Consequently, this research contributes to the research on legitimacy-driven behavior of Bangladeshi banks. This behavior rather leads to a reactive adoption of sustainability activities instead of proactive behavior.

Keywords: sustainable banking; Bangladesh; legitimacy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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