Research On The Influence Of ESG Performance On The Financial Performance Of Commercial Banks

During the "14th Five-Year Plan" period,our country further implements the strategy of sustainable development,practices the development concept of "green rivers and green mountains are golden hills and silver mountains".At the same time,we encourage and guide more social capital to flow to green,low carbon and environmental protection industries,and support the green and sound development of industrial industries,gradually establish a complete green finance system to lay the foundation for realizing our high-quality economic development.The investment philosophy of environmental,social and corporate governance(ESG)is based on traditional investment decisions,and then comprehensively considers the operational sustainability of enterprises in the three dimensions of environmental,social and corporate governance,which is highly consistent with China’s sustainable development strategy.Although ESG is still a new concept in Chinese financial market,in recent years,the rating system of Chinese enterprises ESG has become more and more perfect,and has gradually become an important index of evaluating corporate social responsibility.Good ESG performance can enhance corporate influence and social reputation,so that enterprises can obtain excess earnings and improve their own value.Combining the ESG concept with the enterprise’s investment and business decision can also promote the green development of our economy.Besides,commercial banks,as special enterprises,are the core of our modern financial system,which has decisive significance in implementing monetary policy and regulating the scale of social credit,and is also the "fixed star" of financial stability in our country.Therefore,commercial banks should practice the concept of ESG development and play an exemplary role.At present,few domestic scholars have studied the correlation between ESG and banks.Existing research objects mainly focus on enterprises,and there are even fewer studies on the relationship between ESG and the financial performance of commercial banks.To sum up,this paper studies and analyzes the following three issues: First,it explores the comprehensive performance of banks’ ESG and whether there is a correlation between a single indicator and financial performance.Second,whether ESG performance can improve its own financial performance by improving the green reputation of commercial banks.Third,whether the ESG performance of commercial banks of different natures has different degrees of influence on financial performance.This paper firstly reviews and summarizes the research literature from the perspective of ESG performance,the existing evaluation system,and the correlation between ESG and bank financial performance.Secondly,based on four basic theories,including stakeholder theory,sustainable development theory,corporate social responsibility theory and green reputation theory,this paper explores the influence mechanism of ESG on commercial banks’ financial performance and puts forward research hypotheses.Thirdly,this paper selects the data of 16 Chinese commercial banks from 2010 to 2022,constructs a panel data model for empirical analysis and draws conclusions,and then tests the robustness of the empirical results.Finally,suggestions are put forward according to the research conclusions,and prospects are made according to the research conclusions.This paper draws the following conclusions:(1)there is a positive correlation between commercial banks with good ESG performance and their financial performance,which still exists after the lag of one step;The single index of ESG positively promotes the financial performance of commercial banks.(2)There is a partial mediating effect of green reputation between ESG performance and bank financial performance,that is,ESG indirectly improves bank financial performance by affecting the green reputation of commercial banks.(3)ESG performance has a differentiated impact on commercial banks of different natures,and the ESG performance of large state-owned commercial banks has a stronger impact on their own financial performance.This paper innovatively studies the influence of ESG performance on the financial performance of commercial banks.Secondly,it first introduces the intermediary variable of green reputation to explore the influence of ESG performance on the financial performance of commercial banks.This paper supplements the research on the correlation between ESG and commercial banks,providing a reference for further in-depth analysis and discussion in the future.