Analysis of the Effect of the ESG Score on Bank Profitability in the ASEAN Region (Indonesia, Malaysia, Thailand, Vietnam, and Philippines) Before and During the COVID-19 Pandemic

Huzaifah Ar Rasyid () and Cynthia Afriani Utama ()
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Huzaifah Ar Rasyid: University of Indonesia, Faculty of Economics and Business
Cynthia Afriani Utama: University of Indonesia, Faculty of Economics and Business

A chapter in Proceedings of the International Conference on Economics, Management, and Accounting (ICEMAC 2022), 2023, pp 162-166 from Springer

Abstract: Abstract We examine the relationship between environmental, social, and governance (ESG) score and bank profitability. Our sample includes over the period 2018–2021 from 5 ASEAN countries (Indonesia, Malaysia, Thailand, Vietnam and Philippines). We employ System Generalized Method of Moments (GMM) estimation to control for endogeneity. Environmentally friendly activities have the greatest effect on bank value. We examine the channels through which ESG activity impacts bank profitability and explain why proponents of both stakeholder theory and trade-off theory have found evidence to support their predictions of the relationship between ESG activity and bank value.

Keywords: ESG; Banking Industry; Sustainable Finance; ASEAN (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-226-2_14

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DOI: 10.2991/978-94-6463-226-2_14

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