Green Finance, ESG Disclosure, and Sustainable Financial Performance in Banking: A Systematic Literature Review from a Southeast Asian Perspective

Journal: International Journal of Economics, Management and Accounting

Publication: 2026-10-31

DOI: 10.47353/ijema.v4i2.440

Abstract

This study examines the relationship between green finance, environmental, social, and governance (ESG) disclosure, and sustainable financial performance in the banking sector, with particular attention to Southeast Asia. Using a systematic literature review (SLR) guided by the PRISMA 2020 framework, this study analyzes Scopus-indexed publications from 2016 to 2026, with the final search conducted on 12 September 2026. A total of 31 studies were included, comprising 23 bank-level studies and eight complementary non-bank studies. Narrative and thematic synthesis identified five major research themes concerning green finance instruments, ESG performance, disclosure quality, the interaction between green finance and ESG, and regulatory and institutional frameworks. The findings indicate that green credit dominates existing banking research, whereas empirical evidence on green bonds and green investment remains limited. Although green finance is generally associated with reduced banking risks, its effects on profitability vary according to institutional conditions, bank characteristics, and time horizons. Furthermore, the distinction between ESG disclosure quality and ESG performance remains critical, as direct empirical evidence of the moderating role of ESG disclosure quality in the relationship between green finance and bank profitability is still insufficient. The review also identifies significant geographical and methodological gaps in Southeast Asian banking research. To address these limitations, the study develops an integrative conceptual framework and six research propositions emphasizing instrument-specific effects, disclosure credibility, regulatory conditions, and bank-level characteristics. These findings provide a foundation for future empirical investigations and contribute to a more nuanced understanding of sustainable banking performance in emerging Southeast Asian economies.