Given that Sweden is one of the most sustainable countries in the world (RobecoSAM, 2018), with a big number of its companies as active participants in CSR, we investigate the impact that these CSR activities could have on CFP with a focus on the Financial sector, using in 26 listed Financial Institutions. As we will find out from the existing literature, the CSR-CFP relationship is neither strictly negative nor positive. If it is positive, then the firm will allocate more resources to CSR to achieve better financial performance, and the firm may fore-go or approach CSR initiatives with caution if they affect CFP negatively. Past researchers have studied this relationship before and found that the reason why financial institutions get involved in socially responsible activities is to gain public trust and justification usually after a public financial scandal. So, we explore this further expecting that if it is indeed a matter of fact that these institutions gain the justification from the public that they so desire when they choose to get involved in socially responsible activities, then it should be that the public trust and justification would translate into improved financial performance. Therefore, the research question that we seek to answer is “Does Corporate Social Responsibility (CSR) have an Impact on Corporate Financial Performance (CFP) in the Listed Swedish Financial Institutions”

We examined the relationship between CSR and CFP using 26 Swedish financial institutions that are listed on Nasdaq Nordic stock exchange market (Stockholm) for the period between 2015 and 2019. The Fixed Effects Model regression analysis for panel data was used to test this relationship and we found that when Swedish financial institutions get involved in CSR, their financial performance is neither worsened or improved because of the insignificant ESG coefficients that we found.  Swedish financial institutions' engagement in socially responsible activities does not guarantee an impact on their financial performance.