Sustainability reporting and bank performance in a developing country

Md. Abdul Halim, Reshma Pervin Lima () and Md. Nazmul Islam ()
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Md. Abdul Halim: Department of Accounting, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902, Bangladesh
Reshma Pervin Lima: Department of Accounting, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902, Bangladesh
Md. Nazmul Islam: Department of Accounting, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902, Bangladesh

International Journal of Financial Engineering (IJFE), 2024, vol. 11, issue 02, 1-25

Abstract: The purpose of this study is to test whether sustainability reporting leads to better performance and creates value for investors in developing markets. This study examined the 32 Bangladeshi banks. The generalized method of moments (GMM) is used to analyze this study. Ordinary least square (OLS) is used for robustness check in this study. The finding of this study shows that there is a significant corporate social responsibility (CSR) and a negative association between environmental, social, and corporate governance (ESG) scores and bank performance of Bangladeshi banks. The result of ESG indicates that environmental, social and governance performances reduce both banks’ profitability and values. The results of the research show that ESG has a significant CSR, insignificant ED and CG and negative impact on the performance of banks and the economic benefits of shareholders. Unfortunately, this study also shows that there is no relationship between environmental disclosure, corporate governance (ECG) and bank performance (ROE). Finally, this study provides a policy implication and future guidelines to all stakeholders.

Keywords: Sustainability reporting; ESG disclosure; banks performance; generalized method of moments (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S242478632450004X

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