The relationship between esg, financial performance and the banking industry: a systematic literature review

The paper presents a systematic literature review (SLR) on the relationship between environmental, social, and governance (ESG) and financial performance in the banking sector. The study uses bibliometric and content analysis to identify key drivers, challenges, and emerging trends in ESG integration within financial institutions. The research methodology is based on an extensive review of academic contributions from Scopus, Web of Science, PubMed, and Google Scholar. This results in an initial selection of 121 papers, refined to a final dataset of 88 relevant publications. The bibliometric analysis was conducted using VOSviewer software to map co-occurrence networks and thematic clusters. Findings indicate that ESG adoption positively influences financial resilience, investor confidence, and long-term stability, though challenges such as regulatory fragmentation, compliance costs, and inconsistent sustainability frameworks persist. However, disparities in ESG adoption across different banking markets highlight the need for more harmonized regulatory frameworks to encourage sustainability integration in developing economies. Additionally, the study underscores the growing role of technological advancements, such as artificial intelligence and blockchain, in enhancing ESG analytics and reporting. The research contributes to the academic and industry discourse by highlighting future research directions, particularly in digital finance, sustainability-driven investment strategies, and sector-specific ESG implementation.