Nonlinear Impact of ESG Practices on MENA Banks’ Performance: Method of Moments Panel Quantile Regression Approach

Amal Zaghouani Chakroun, Dorra Hmaied and Rahim Kallel

Chapter 9 in Climate Finance & Accountability:A Comprehensive and Holistic Approach, 2026, pp 253-276 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This study investigates the nonlinear effects of ESG pillars on the financial performance of banks in the MENA region from 2010 to 2022. Utilizing a method of moments panel quantile regression, we find that ESG practices significantly influence banks’ performance, particularly through the environmental and social pillars. Our analysis also reveals that Islamic banks outperform their conventional counterparts and exhibit superior ESG practices. Our results remain robust across various quantiles and estimation methods.

Keywords: Climate Finance; Environmental; Social; and Governance (ESG); Climate-Related Financial Disclosures; TCFD (Task Force on Climate-Related Financial Disclosures); Corporate Sustainability; Financial Risk Management; Sustainable Investing; Climate Risk Reporting; Corporate Environmental Accountability; Regulatory Frameworks; Capital Markets and Climate Risk; Carbon Transition Risk; Physical Climate Risk; Financial Disclosure Regulation; Responsible Investment (search for similar items in EconPapers)
JEL-codes: G32 M14 Q54 Q56 (search for similar items in EconPapers)
Date: 2026
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