Abstract
Purpose: This study tries to determine whether the financial performance of Bangladeshi-listed banks on the Dhaka Stock Exchange (DSE) is significantly associated with the environmental accounting information disclosure (ENVI).
Design/methodology/approach: This study uses panel data from the annual reports of 34 from 36 domestic commercial banks listed on the Dhaka Stock Exchange (DSE) in Bangladesh, comprising 238 observations for the period 2018–2024. The non-probability sampling method (convenience procedure) was used. A robust dynamic panel estimation approach is employed, using two-step system GMM with clustered standard errors for ROA and ROE to address dynamic endogeneity and within-firm correlation, and RegHDFE with firm and year fixed effects for EPS.
Findings: The study establishes that Bangladeshi banks’ ENVI has a differential consequence on financial related performance. Under robust estimation, ENVI does not exhibit a statistically significant effect on ROA, ROE, or EPS. The consistently positive direction of ENVI coefficients, however, suggests a initial relationship that may strengthen as disclosure practices mature.
Originality/value: These findings provide that increasing environmental accountability by raising awareness and offering tax advantages can encourage businesses to adopt more sustainable practices. Future research should consider broader samples, longer observation periods, social governance, and other variables to better understand the enduring effects of financial performance on banking stability in emerging economies like Bangladesh.