Type of the article: Research Article
Abstract
ESG integration has become increasingly relevant to banking-sector performance, particularly in emerging markets where standardized external ESG ratings remain limited. This study aims to examine the association between ESG performance and the financial performance of selected Armenian commercial banks and to assess the relative role of the Environmental, Social, and Governance dimensions. The study uses a multi-method design based on 27 bank-year observations for Ardshinbank OJSC, Ameriabank CJSC, and ACBA Bank OJSC over 2017–2025, combining a disclosure-based ESG framework, descriptive analysis, Pearson correlation, Ordinary Least Squares regression, Multi-Criteria Decision Analysis, and evidence from 52 banking professionals. Overall ESG performance is positively associated with ROA (r = 0.64) and ROE (r = 0.60) and negatively associated with the Cost-to-Income ratio (r = −0.52). In the OLS analysis, Governance, Environmental, and Social dimensions show positive estimated relationships with ROA, with coefficients of 0.037 (p = 0.001), 0.023 (p = 0.012), and 0.019 (p = 0.018), respectively. Governance therefore demonstrates the strongest estimated association among the three dimensions. The MCDA framework assigns weights of 45% to Governance, 30% to Environmental, and 25% to Social factors, providing additional evidence of the relative importance of governance-related practices. The findings provide preliminary evidence of positive ESG–financial performance associations in the selected Armenian banks, while the results should be interpreted as exploratory and associational rather than causal due to the limited sample.