From ESG to Bank Performance through Green Financing: A Systematic Literature Review and Future Research Agenda for Sustainable Banking Research

Weny Rosilawati, Sri Hasnawati, Igo Febrianto

Abstract


Sustainable banking research increasingly examines how environmental, social, and governance practices shape bank outcomes, yet ESG and green financing are usually modeled as separate drivers of performance. This study systematically reviews how green financing functions as the operational pathway linking ESG orientation to bank performance. Following PRISMA, Scopus-indexed journal articles published from 2016 to 2026 were screened; 46 eligible studies were synthesized using descriptive mapping, thematic classification, theory mapping, and Watase Uake-assisted analysis. The evidence shows rapid publication growth after 2021 and a concentration in emerging markets. Five research streams dominate: ESG and bank performance, green financing and bank performance, sustainable banking practices, governance and ESG performance, and green financing as a pathway or mediator. Only a small share explicitly tests the mediating role of green financing. ESG is more likely to improve profitability, efficiency, risk, asset quality, and stability when sustainability commitments are translated into green credit, green loans, sustainability-linked lending, and environmentally responsible portfolio allocation

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DOI: https://doi.org/10.32535/jicp.v9i3.5149

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