Impact of Environmental and Social Governance on Bank Financial Performance: Evidence from Tunisia

Tijani Amara, Wissem Benali

Abstract

Environmental and social governance (ESG) refers to a company’s duty to conduct its business in a way that supports social initiatives in addition to its primary objective of making a profit. There is a perception that financial success and social responsibility are at odds. Interestingly, they work best together. The current study examines ESG in Tunisian private sector banks. This study examines the relationship between corporate social responsibility (ESG) and financial performance and the impact of ESG on the financial performance of Tunisian private banks. The current study found that only ESG expenditures and activities are related to return on assets, whereas only ESG expenditures are related to return on equity. The current study found that only ESG spending and ESG activities are related to return on assets, whereas only ESG spending is related to return on equity. In addition, the analysis found that ESG spending was the only ESG variable that impacted financial performance in terms of both ROA and ROE.

 

Keywords: environmental and social governance, financial performance, business.

 

https://doi.org/10.55463/issn.1674-2974.50.8.18


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References


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