Abstract :

Unstable economic conditions and high uncertainty resulting from the COVID-19 pandemic and geopolitical tensions between Russia and Ukraine have made it difficult for global economic recovery. Banks has an important role in the economy to support the implementation of a sustainable economy through the disbursement of sustainable financing. The bank expects sustainability financing has a positive impact on financial performance. It can attract investors because one of the main priorities of investors at this time is a sustainable business. The study uses 68 banks from G-20-member countri3es and several countries in ASEAN that are not included in the G-20 from 2019 to 2021 performance. In assessing the impact of the disbursement of sustainable financing on financial performance (using the ratio of non-performing loans, net interest margin, and capital adequacy ratio as financial performance variables), the authors use panel data regression, while to assess the impact of sustainable financing distribution on ESG performance using binary logistic regression. The results show that there is a significant positive impact from the distribution of sustainable financing on net interest margins and the capital adequacy ratio, and a significant negative impact on the non-performing loans ratio. In addition, this study’s results also show a significant positive impact on improving ESG performance. This shows that by the disbursement of sustainable financing, banks will get a positive impact on financial performance and can attract investors.

---

Keywords :

Bank; G-20; Financial Performance; ESG Performance; Logistic Binary Regression; Panel Data Regression; Sustainable Financing.

---

References :

1. Bansal, P., & DesJardine, M. (2014). Business sustainability: It is about time. Strategic Organization, 70-78.
2. Bansal, P., & Roth, K. (2000). Why Companies Go Green : Responsiveness. Academy of Management, 717-736.
3. Cui, Y., Geobey, S., Weber, O., & Lin, H. (2018). The Impact of Green Lending on Credit Risk in China. Sustainability, 10(6).
4. Duque Grisales, E., & Aguilera Caracuel, J. (2021). Environmental, Social and Governance (ESG) Scores and Financial Performance of Multilatinas: Moderating Effects of Geographic International Diversification and Financial Slack. Journal of Business Ethics, 315 – 335.
5. Faraway, J. (2016). Extending the Linear Model with R: Generalized Linear, Mixed Effects and Nonparametric Regression Models. CRC Press, 153-154.
6. Guan, R., Zheng, H., Hu, J., Fang, Q., & Ren, R. (2017). The Higher Carbon Intensity of Loans, the Higher Non-Performing Loan Ratio: The Case of China. Sustainability, 667.
7. Gurajati, D., & Porter, C. (2009). Basic Econometrics 5th (fifth Edition). McGraw-Hill.
8. (2018). Konsep Analisa Laporan Keuangan Dengan Pendekatan Rasio dan SPSS. Yogyakarta: Deepublish.
9. Hermawan, A., & Yusran, H. (2017). Penelitian Bisnis Pendekatan Kuantitatif. Depok: Kencana.
10. Hosmer, D., Hosmer, T., Le Cessie, S., & Lemeshow, S. (2002). Comparison of Goodness-of-fit Tests for The Logistic Regression Model. Statistics in Medicine, 965-980.
11. Hosmer, D., Lemeshow, S., & Sturdivant, R. (2013). Applied Logistic Regression. New Jersey: Wiley.
12. (2017). Analisa Laporan Keuangan. Malan: UB Press.
13. Kirkwood, B., & Sterne, J. (2003). Essential Medical Statistics. Blackwell Science, 205-2012.
14. Kumar, V., & Christodoulopoulou, A. (2014). Sustainability and branding: An integrated perspective. Industrial Marketing Management, 6-15.
15. Nyabaga, R., & Matanda, J. (2020). Effect of Firm Characteristics on Financial Performance of Listed Commercial Banks in Kenya. International Journal of Economics and Financial Issues, 255 – 262.
16. PricewaterhouseCoopers Global. (2023, February 21). The ESG execution gap: What investors think of companies’ sustainability efforts. Retrieved from PwC Global: https://www.pwc.com/GIS2022
17. Sukmadewi, R. (2020). The Effect of Capital Adequacy Ratio, Loan to Deposit Ratio, Operating-Income Ratio, Non Performing Loans, Net Interest Margin on Banking Financial Performance. eCo-Buss, 1 – 10.
18. Tarmuji, I., Maelah, R., & Tarmuji, N. (2016). The Impact of Environmental, Social and Governance Practices (ESG) on Economic Performance: Evidence from ESG Score. International Journal of Trade, Economics and Finance, 67 – 74.
19. Weber, O. (2005). Pages 197-206. Corporate Social Responsibility and Environtmental Management, 73-87.
20. Wibowo, A. (2012). Aplikasi praktis SPSS dalam Penelitian. Yogyakarta: Gava Media.