Research On The Impact Of Environment,Social And Corporate Governance (ESG) On The Financial Performance Of Commercial Banks

In building a "beautiful China" in the new era,environmental,social,and corporate governance(ESG)has gradually become the starting point to realize new progress in ecological civilization construction and further implement the sustainable development strategy.Environment,society,and corporate governance(ESG)refer to how to effectively reflect enterprise strategies and actions in the three aspects of the environment,society,and corporate governance in the process of enterprise operation.As notable enterprises,commercial banks,like other industries,attach great importance to their sustainable development ability.The CBRC also clearly proposed that banking financial institutions should improve the environmental and social risk management system,and incorporate environmental,social,and governance requirements into the whole process of credit granting.How to achieve sustainable development while maintaining profits has become the primary problem that should be solved.However,domestic research on the relationship between ESG and financial performance mainly focuses on energy-intensive industries,and there are not many related studies on the impact between ESG performance and the financial performance of commercial banks.Therefore,this paper selects 16 listed commercial banks in China as samples to analyze the ESG performance and that of commercial banks from 2011 to 2020,and explore their internal links.This paper first sorts out the domestic and foreign literature on the relationship between ESG and enterprise performance through the literature research method analyzes the conclusions and future development trends of the existing relevant research and points out the innovation points of the article.Secondly,from the theory of sustainable development,stakeholder theory,and principal-agent theory three perspectives,the ESG performance analysis mechanism,and put forward the hypothesis of this paper,namely ESG for commercial Banks’ current financial performance negative impact,the influence between individual indicators,and the effect has a time delay.Thirdly,the relevant ESG data and financial data of 16 Chinese listed banks from 2011 to 2020 were selected,and the research model was constructed for panel regression analysis.Finally,the findings were tested for robustness.The research results of this paper show that the current ESG performance of commercial banks will have a negative impact on financial performance,And this impact is mainly from the environmental level,little significant impact on financial performance in social and corporate governance in the short term,In the environment,the performance of the current period will be negative because of short-term funds;In the analysis of lag phase one,lag phase two,lag phase three,lag phase four-phase and lag phase five,The empirical results show that the impact of environment,society and corporate governance on financial performance are time lag,Specifically in the environmental and social investment in the long term,Will significantly promote the company’s financial performance improvement;At the corporate governance level,The current period will bring some improvement to the financial performance,But as the business grows,It will have a negative impact on the financial performance of commercial banks.This paper makes the following suggestions: The positive impact of ESG performance on financial performance will gradually emerge over time,which requires sufficient confidence and patience of enterprise managers.Commercial banks should continue to pay attention to the opportunities brought by ESG development,increase the proportion of green credit,promote service objects to paying more attention to their ESG performance,promote sustainable development;design ESG-related financial products,encourage customers to invest in ESG financial products,and assume more social responsibilities.The government and regulatory authorities should actively guide commercial banks to develop ESG by formulating strict ESG disclosure standards and setting up reward and punishment mechanisms.