Abstract
Corporate sustainability is the integration of environmental protection, financial benefit, and social responsibility into management and business operations. There is insufficient evidence for its relationship with operating performance and productivity. Furthermore, it becomes doubtful when investors standardize corporate sustainable strategies. This study evaluates the performance and productivity of sustainable banks, exploring practical issues by providing supporting evidence. A two-stage performance evaluation is employed with the integration of data envelopment analysis (DEA) and Malmquist productivity index (MPI) to evaluate sustainable bank performance and productivity for 9 years (2010–2018) in comparison with non-sustainable banks. DEA is used to define dynamic benchmarking, and MPI builds on time-series analysis. The results of our study reveal that sustainable banks are more efficient and productive. The productivity of sustainable banks and non-sustainable banks was influenced by external and internal factors, respectively.
Highlights
The concept of sustainable development aims to meet present needs without disturbing the chances of future generations to fulfill their own needs
data envelopment analysis (DEA) CCR model is used to evaluate the efficiency of sustainable banks (SBs) and non-sustainable banks (NSBs)
The total factor productivity (TFP) of NSBs during the period 2010–2011 to 2011–2012 decreased by 0.11%; in 2011–2012 to 2012–2013, it increased by 2.93%; between 2012–2013 and 2013–2014, it decreased by 4.41%, in 2013–2014 to 2014–2015, it increased by 2.36%; from 2014–2015 to 2015–2016, it decreased by 0.91%; for 2016–2017, it increased by 2.07%; and in the 2016–2017 to 2017–2018, it decreased by 1.09%
Summary
The concept of sustainable development aims to meet present needs without disturbing the chances of future generations to fulfill their own needs. Prior studies are divided into three groups based on the relationship between corporate sustainability and its financial benefit in relation to a firm’s environmental performance. The third group argued that there might not be a significant relationship [17,18,19,20] Their findings show that firms do not consider socio-environmental performance, and have to reduce the prices of their products and services to increase their sales. The integrated performance of the bank is based on its sustainable strategies, encompassing economics in both environmental and social dimensions. The literature provides little evidence to decide a firm’s sustainable strategies based on economics, be it with social or environmental dimensions responsible for the firm’s performance. This is what this study aims to address.
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