Sustainability Practices and Bank Financial Performance in Emerging Markets : Evidence from the Triple Bottom Line (TBL) Framework.

Abstract

This study aims to examine the impact of sustainability practices, based on the Triple Bottom Line (TBL) approach encompassing (economic, social, and environmental dimensions), on the financial performance of banks operating in emerging economies. In addition, the study investigates the moderating role of good corporate governance in shaping this relationship. Although prior literature generally suggests a positive association between sustainability practices and financial performance, empirical evidence from emerging banking markets remains limited and inconclusive, thereby revealing a research gap that this study seeks to address.The empirical analysis is based on a sample of banks listed on the stock exchanges of Iraq, the United Arab Emirates, and Iran over the period 2019–2021. The research hypotheses were tested using multiple regression analysis. The findings indicate that none of the sustainability dimensions exhibit a statistically significant effect on banks’ financial performance. Furthermore, the results do not provide evidence of a statistically significant moderating effect of good corporate governance on the relationship between sustainability practices and financial performance.These results suggest that sustainability practices in many banks operating within emerging markets remain largely voluntary and symbolic rather than strategically embedded. The absence of effective governance mechanisms appears to weaken the potential contribution of sustainability initiatives to financial performance.