The impact of ESG on financial performance of companies is a very current topic, as ESG has been lately gaining increasing attention from investors and management. Although the nature of this relationship has been attempted to be assessed by many studies, their conclusions still vary. Therefore, the aim of this bachelor's thesis is to evaluate whether ESG has a positive impact on the financial performance of the largest European banks between the years 2019 and 2022. Financial performance i... show full abstractThe impact of ESG on financial performance of companies is a very current topic, as ESG has been lately gaining increasing attention from investors and management. Although the nature of this relationship has been attempted to be assessed by many studies, their conclusions still vary. Therefore, the aim of this bachelor's thesis is to evaluate whether ESG has a positive impact on the financial performance of the largest European banks between the years 2019 and 2022. Financial performance is defined by the return on assets (ROA), return on equity (ROE), and Tobin's Q. The relationship between ESG and each of these indicators is evaluated by linear regression analysis. The analysis results found a positive and statistically significant effect of ESG on ROA and ROE. In contrast, the impact of ESG on Tobin's Q was classified as statistically insignificant, therefore no significant relationship between ESG rating and Tobin's Q was found in this case. |