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Abstract

Sustainability has grown in popularity in recent years. As the environment and society demands for more sustainable growth from companies, it is interesting to know what motivates a company to engage in sustainable activities. Qualitative studies regarding this topic have laid down the framework which empirical studies can use. On the other hand, empirical studies have analyzed the relationship of ESG scores with other variables. To know whether a firm is incentivized financially by engaging in ESG activities or not, ESG scores of publicly-listed banks in the ASEAN region were tested for their effects on financial performance. Results of this study suggest that overall ESG scores have a significant negative effect on financial performance. This is contrary to published papers about the same phenomenon observed in other industries. Recommendations were given to bank managers and stockholders, as well as future researchers.