Aim: The purpose of the study is to investigate the connection between Nordic banks’ sustainability reporting within ESG (environmental, social and governance issues) and the impact it has on their financial performance. Method: Quantitative data was obtained for 22 public companies for the years 2020-2022 from the Refinitiv Eikon database. The data was then analyzed using Pearson’s correlation test, VIF-test and three multiple regression analyzes through the statistical program IBM SPSS. Result and conclusion: The study’s results show a weak negative correlation between the ESG-score and the companies’ financial performance. The study finds the strongest significant negative correlation between return on equity (ROE) and ESG-score, where ROE decreases by 12,6% when ESG increases by one unit. The result of the study shows that there is a weak negative relationship between the ESG-score and the banks return on total capital and return on equity. The relationship between ESG’s subcomponents also show a weak negative relationship to the banks return on total capital and return on equity. Finally, the result also shows a weak negative relationship between the bank's market performance and return on total capital and return on equity. Contribution of the thesis: As the purpose of the study is to study what connection there is between ESG and the financial performance of Nordic banks, the study addresses a research gap as previous studies have not limited themselves to this geographical area. The study thus contributes to research within the subject of business economics. The result consistently shows a negative relationship between ESG and financial performance, which may be of interest to investors and stakeholders as previous research did not establish this result for the area concerned. Suggestions for future research: A proposal for future research is to measure ESG’s impact on profitability in other industries with an environmental impact and in other countries. Future studies can also choose a qualitative research method to study in depth the impact ESG has on the companies, this because the quantitative research method with the collection of short-term data does not go in depth with this.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:hig-43035 |
| Date | January 2023 |
| Creators | Jansson, Axel, Read, David |
| Publisher | Högskolan i Gävle, Företagsekonomi |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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