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Green Finance:: Unveiling the Link Between Sustainable Practices and Profitability in Ghana’s Financial Sector
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
2024 (English)Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
Sustainable development
Sustainable Development
Abstract [en]

The integration of sustainability practices into business operations has gained increasing attention in recent years, particularly in the financial sector. However, the impact of these practices on financial performance in the context of Ghana's financial industry remains understudied. This study investigated the effects of sustainability practices, specifically environmental, social, and governance (ESG) considerations, on the financial performance of banks in Ghana. The research focuses on three key financial metrics: return on assets (ROA), return on equity (ROE), and return on invested capital (ROIC). The study employs panel regression analysis, including fixed and random effects models based on the Hausman test. Data from 30 banks in the Ghanaian financial sector spanning from 2010 to 2022 were analyzed. Various diagnostic tests, including multicollinearity, Wooldridge, Breusch-Pagan Test, and Cragg-Donald Wald F test, were conducted to ensure the robustness of the results. The results show that sustainability practices have a significant positive impact on all three financial performance indicators (ROA, ROE, and ROIC) in the Ghanaian financial industry. Banks that integrate ESG considerations into their operations tend to achieve higher financial returns. These findings support the strategic importance of sustainability practices in enhancing operational efficiency, mitigating risks, improving brand reputation, and attracting socially responsible investors. The study underscores the potential for sustainability initiatives to drive long-term value creation and competitive advantage in Ghana's financial sector.

Place, publisher, year, edition, pages
2024. , p. 80
National Category
Humanities and the Arts
Identifiers
URN: urn:nbn:se:hj:diva-66247OAI: oai:DiVA.org:hj-66247DiVA, id: diva2:1899488
Subject / course
JIBS, Business Administration
Presentation
B2042 (English)
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Available from: 2024-09-20 Created: 2024-09-19 Last updated: 2025-10-13Bibliographically approved

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CiteExportLink to record
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  • apa
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