PT  - JOURNAL ARTICLE
AU  - Öcal, Hüseyin
AU  - Yilmaz, Tarik
AU  - Abdulbasah Kamil, Anton
TI  - The Impact of Environmental, Social and Governance (ESG) Pillar Scores on Banking Sector Stock Returns: An Empirical Analysis of Banks in the MSCI Emerging Market Index
DP  - 2026 Jan 5
TA  - European Journal of Business Science and Technology
PG  - 163--181
VI  - 11
IP  - 2
IS  - 23366494
AB  - This article examines whether investing in ESG impacts banks' stock returns, aiming to illustrate the value generated by ESG investment in the MSCI Emerging Markets Index. The fiscal year-end data of thirty-five financial companies within the Index, covering the period from December 31, 2015, to December 31, 2022, have been utilised. The analysis employs a pooled panel regression model utilising robust least squares estimation. Firm-specific and market-specific variables are used as independent variables. We have observed a significant positive direct relationship between the social pillar score and stock returns. Banks may initiate investments in social pillars in the Index. In addition, firm-specific variables such as market capitalisation, return on equity, capital adequacy, and price-earnings ratio influence the relationship between ESG pillar scores and stock returns. We recommend that portfolio managers closely monitor improvements in ESG pillar scores alongside firm-specific variables to predict banks' stock returns in the index.