The nexus of environmental, social, and governance practices with the financial performance of banks: A comparative analysis for the pre and COVID-19 periods
AbstractThis study aims to examine the impact of ESG practices on the financial performance of the banking industry of Pakistan during the pre and COVID-19 periods. The data were collected from the annual reports of selected banks for the pre-COVID-19 period (2018) and the COVID-19 period (2020). Re...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2023-12-01
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| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2023.2183654 |
| _version_ | 1797658390922526720 |
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| author | Muhammad Zahid Syeda Um-Ul-Baneen Naqvi Amin Jan Haseeb Ur Rahman Said Wali |
| author_facet | Muhammad Zahid Syeda Um-Ul-Baneen Naqvi Amin Jan Haseeb Ur Rahman Said Wali |
| author_sort | Muhammad Zahid |
| collection | DOAJ |
| description | AbstractThis study aims to examine the impact of ESG practices on the financial performance of the banking industry of Pakistan during the pre and COVID-19 periods. The data were collected from the annual reports of selected banks for the pre-COVID-19 period (2018) and the COVID-19 period (2020). Results of the t-test show that there is a significant difference in ESG disclosures between the pre and during-COVID-19 periods. The regression analysis shows that the formative ESG factor positively affected the financial performance of the banking industry during the pre-COVID-19 period. While the reflective factors (environmental and social) positively affected the financial performance of the banking industry in the pre-COVID-19 period. During the COVID-19 period, the formative factor of ESG was found to have a significant positive impact on the financial performance of the banking industry. Similarly, in this period, the reflective factors (social and governance) were also found to have a significant positive impact on the financial performance of the banking industry. Interestingly, environmental sustainability negatively impacted the financial performance during the COVID-19 period. It indicates that the banking industry ignored environmental sustainability practices during the COVID −19 period, negatively affecting their financial performance. It suggests that ignoring environmental sustainability practices will deteriorate financial performance following the COVID-19 period. These results have profound policy implications for practitioners and policymakers in the banking industry, which are discussed. |
| first_indexed | 2024-03-11T17:58:21Z |
| format | Article |
| id | doaj.art-c84fca09cf7647e99681d3e5d858e966 |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-03-11T17:58:21Z |
| publishDate | 2023-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-c84fca09cf7647e99681d3e5d858e9662023-10-17T10:51:06ZengTaylor & Francis GroupCogent Economics & Finance2332-20392023-12-0111110.1080/23322039.2023.2183654The nexus of environmental, social, and governance practices with the financial performance of banks: A comparative analysis for the pre and COVID-19 periodsMuhammad Zahid0Syeda Um-Ul-Baneen Naqvi1Amin Jan2Haseeb Ur Rahman3Said Wali4Management Sciences Department, City University of Science and Information Technology, Peshawar, PakistanManagement Sciences Department, City University of Science and Information Technology, Peshawar, PakistanFaculty of hospitality, Tourism and Wellness, Universiti Malaysia Kelantan, City CampusInterdisciplinary Research Centre for Finance and Digital Economy, King Fahd University of Petroleum and Minerals, Dhahran, Saudi ArabiaDepartment of Management Sciences, Government College of Commerce Peshawar, PakistanAbstractThis study aims to examine the impact of ESG practices on the financial performance of the banking industry of Pakistan during the pre and COVID-19 periods. The data were collected from the annual reports of selected banks for the pre-COVID-19 period (2018) and the COVID-19 period (2020). Results of the t-test show that there is a significant difference in ESG disclosures between the pre and during-COVID-19 periods. The regression analysis shows that the formative ESG factor positively affected the financial performance of the banking industry during the pre-COVID-19 period. While the reflective factors (environmental and social) positively affected the financial performance of the banking industry in the pre-COVID-19 period. During the COVID-19 period, the formative factor of ESG was found to have a significant positive impact on the financial performance of the banking industry. Similarly, in this period, the reflective factors (social and governance) were also found to have a significant positive impact on the financial performance of the banking industry. Interestingly, environmental sustainability negatively impacted the financial performance during the COVID-19 period. It indicates that the banking industry ignored environmental sustainability practices during the COVID −19 period, negatively affecting their financial performance. It suggests that ignoring environmental sustainability practices will deteriorate financial performance following the COVID-19 period. These results have profound policy implications for practitioners and policymakers in the banking industry, which are discussed.https://www.tandfonline.com/doi/10.1080/23322039.2023.2183654environmentalsocialgovernancedisclosuresfinancial performanceCOVID-19 |
| spellingShingle | Muhammad Zahid Syeda Um-Ul-Baneen Naqvi Amin Jan Haseeb Ur Rahman Said Wali The nexus of environmental, social, and governance practices with the financial performance of banks: A comparative analysis for the pre and COVID-19 periods Cogent Economics & Finance environmental social governance disclosures financial performance COVID-19 |
| title | The nexus of environmental, social, and governance practices with the financial performance of banks: A comparative analysis for the pre and COVID-19 periods |
| title_full | The nexus of environmental, social, and governance practices with the financial performance of banks: A comparative analysis for the pre and COVID-19 periods |
| title_fullStr | The nexus of environmental, social, and governance practices with the financial performance of banks: A comparative analysis for the pre and COVID-19 periods |
| title_full_unstemmed | The nexus of environmental, social, and governance practices with the financial performance of banks: A comparative analysis for the pre and COVID-19 periods |
| title_short | The nexus of environmental, social, and governance practices with the financial performance of banks: A comparative analysis for the pre and COVID-19 periods |
| title_sort | nexus of environmental social and governance practices with the financial performance of banks a comparative analysis for the pre and covid 19 periods |
| topic | environmental social governance disclosures financial performance COVID-19 |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2023.2183654 |
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