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Sustainability Committee, External Assurance, and ESG Performance: Empirical Evidence From Banking Industry in Emerging Economies

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  • Yunice Karina Tumewang
  • Taha Almarayeh
  • Esraa Alharasis

Abstract

Driven by the escalating interests on environmental, social, and governance (ESG) issues, we investigate the impact of internal and external governance mechanisms, specifically board sustainability committee (SC) and external assurance (EA), on banks' ESG performance. This study utilized panel dataset of 643 bank‐year observations from 34 Islamic banks (IBs) and 77 conventional banks (CBs) across 12 emerging countries between 2013 and 2023. Sensitivity analyses and GMM regression are also conducted for robustness checks against the baseline model. This study reveals that firms with SC on their boards exhibit significantly higher ESG performance. Furthermore, the results show a positive relationship between EA and enhanced ESG performance. Interestingly, the effects of SC and EA on ESG performance is more pronounced in IBs than in CBs.

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  • Yunice Karina Tumewang & Taha Almarayeh & Esraa Alharasis, 2025. "Sustainability Committee, External Assurance, and ESG Performance: Empirical Evidence From Banking Industry in Emerging Economies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(2), pages 2728-2745, March.
    • Handle: RePEc:wly:corsem:v:32:y:2025:i:2:p:2728-2745
    DOI: 10.1002/csr.3095
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