The link between ESG and financial performance of the Nordic banks : AnEmpirical Analysis of the Relationship Between ESG Scores and Financial Performance of the Banks in the Nordic Region
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- Master Thesis 
This study examines the relationship between financial performance (FP) and ESG performance of banks in the Nordic region. ESG-FP link is examined using fixed effect and 2SLS regressions on two samples of data obtained from Thomson Reuters' database which spans the years 2011 to 2021. In order to measure financial performance, we employ four different dependent variables of Tobin's Q, ROA, ROE, and SR. We discover a certain number of significant positive links between S Score, E Score, G Score, and ESG combined Score with the four financial performance indicators. Furthermore, by carrying out 2SLS regression and removing endogeneity problems, we conclude causal relationships between ESG Score and FP. Hence, not only our results highlight that ESG Score and its pillars in most cases are positively associated with ROA, ROE, SR, and TQ but also FP can be counted as a positive and significant predictor of ESG.