Assessment of Private Banking Sector’s ESG initiatives towards Sustainable Entrepreneurship in India
DOI:
https://doi.org/10.53555/jaes.v22i1.139Keywords:
Private Sector Banks, ESG, Financial Performance, emerging, Asian Economies, Sustainable entrepreneurshipAbstract
Sustainable Entrepreneurship is emerging as a crucial approach for the Asian emerging economies to achieve sustainable development. The emerging Asian Economies are mandating the banks including private sector banks (PvSBs) to balance profitability with sustainability issues. The banks are also shaping the capital innovation and long-term business sustainability. This study examines the sustainability practices of PvSBs towards environment, social, and governance (ESG) mandates towards sustainable entrepreneurship (SE) and small and medium enterprises (SME).
This research selected the sample of six leading private banks and evaluates the impact of ESG indicators on profitability indicators viz. Return on Assets (ROA) and Return on Equity (ROE) relevant to SE and SME for inclusion. The ESG indicators are examined using nine indicators aligned with SEBI’s Business Responsibility and Sustainability Report (BRSR).
The regression modelling is utilized to analyse the relationships. The analysis reveals that governance and social dimensions strengthen inclusive growth SE and SME lending. While, environmental performance, depicts a negative impact due to higher compliance costs.
These findings suggest that ESG for private banks is no longer peripheral and these are reshaping dynamics of banks. The private banks internalizing ESG as part of their core strategy are better positioned as they are able to mitigate risks and attract investors customers.
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