Life Cycle Analysis of the European Banking Sector's ESG Performance s

Abstract

Business stakeholders are becoming more involved in environmental, social, and governance (ESG) aspects. There is an increasing awareness in the financial services industry of the importance of incorporating ESG factors into strategies, processes, and financial tools to generate value over the medium and long run. While a vast body of literature examines the connection between ESG factors and company performance, only a few studies have specifically investigated the financial services industry, often employing linear models. This research specifically examines the ESG performance of the financial services industry. It utilizes a life-cycle framework to analyze the patterns and relationships of European companies in the sector. This analysis is conducted using linear panel regression models. The study's conclusions serve as crucial benchmarks for investment managers and policymakers. The findings illustrate that superior, enhanced ESG performance can bolster the financial success of industry participants.