Özet:

The aim of the study is to examine the effects of the ESG score, Combined ESG score, ESG discussion score, ESG social score, ESG corporate governance score and ESG environmental score, which are the components of the performance obtained from the environmental, social and corporate governance (ESG) activities of banks, on their asset and return on equity. For this purpose, between 2010-2019, 63 banks from 25 countries are included in the study. As a result of the analysis, it is seen that the ESG corporate governance score positively affects the bank's return on assets, while the ESG, ESG social and ESG environmental scores negatively affect the bank's return on assets. In addition, it is revealed that there is a negative relationship between the bank's return on equity and the ESG social score. It is expected that the findings obtained within the scope of the research will be guiding for many segments. The findings are illuminating on the gains and costs of banks to support responsible and sustainable finance. It also reveals that public and private sector enterprises should consider the relationship of ESG components with financial performance in the stages of capital budgeting and valuation of investments. On the other hand, it is expected to guide regulatory and supervisory institutions in determining and promoting ESG practices that will increase capital efficiency and reduce corporate finance costs. It is thought that while integrating sustainability principles into their investment processes, institutional and individual investors will help them understand the effects of ESG components on portfolio performance in portfolios to be created with socially responsible companies.

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