Assessing Financial Stability through ESG: The Impact of Sustainable Finance on Commercial Banks listed in Pakistan Stock Exchange (PSX)

Syed Shoaib Nazir, Taimur Ashiq, Mazhar Farid Chishti, Riffat Ullah and Athar Marwat
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Syed Shoaib Nazir: Assistant Professor, Chairman School of Management, Forman Christian College University, Lahore, Pakistan
Taimur Ashiq: School of Economics, Henan University, China
Mazhar Farid Chishti: Assistant Professor, Department of Management Sciences, Lahore Garrison University, Lahore, Pakistan
Riffat Ullah: Mphil Scholar, Gomal University, Dera Ismail Khan, Pakistan
Athar Marwat: Research Assistant, Business Administration Department, IQRA National University, Peshawar, Pakistan

Bulletin of Business and Economics (BBE), 2024, vol. 13, issue 3, 120-129

Abstract: The notion of sustainable finance, which encompasses environmental, social, and governance (ESG) considerations, has become increasingly prominent in assessing the financial resilience of companies, particularly within the banking industry, in recent times. The primary objective of this research is to examine the influence of ESG practices on the financial stability of commercial banks that are publicly traded on the Pakistan Stock Exchange (PSX). The study utilizes an extensive dataset of 10 years from 2014 to 2023 that includes significant ESG indicators as well as financial performance metrics, spanning multiple years. The study seeks to analyze the impact of sustainable finance practices on the overall financial stability of the chosen banks using advanced statistical techniques and regression analysis. The results of this study are anticipated to provide insight into the possible advantages and drawbacks of incorporating ESG factors into the operational plans of commercial banks. Moreover, this study will make a valuable contribution to the current body of knowledge on sustainable finance, particularly in the context of emerging economies like Pakistan. In such markets, the importance of ESG factors in shaping financial decision-making is undergoing rapid transformation.

Keywords: financial stability; sustainable finance; commercial banks; SGD (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:rfh:bbejor:v:13:y:2024:i:3:p:120-129

DOI: 10.61506/01.00455

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