EXAMINING THE INFLUENCE OF THE ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) FACTORS ON FINANCIAL PERFORMANCE: A COMPREHENSIVE STUDY OF THE NIGERIAN DEPOSIT MONEY BANKS (NDMB)

This study examines the influence of Environmental, Social, and Governance (ESG) practices on the financial performance of Nigerian Deposit Money Banks (NDMBs), using First Bank, Zenith Bank, and United Bank for Africa (UBA) branches in Lokoja, Kogi State, as case studies. Anchored on stakeholder theory and the resource-based view, the research employed a survey research design, collecting primary data from 125 staff across the selected banks through structured questionnaires. Descriptive statistics, Spearman’s rank-order correlation, and regression analysis were used to evaluate the relationship between ESG dimensions and perceived financial performance. Findings revealed that environmental practices, such as energy efficiency, digitalization, and green financing, showed a statistically significant but weak relationship with perceived performance, suggesting that such initiatives are beginning to shape operational efficiency but may incur short-term costs. Social responsibility initiatives, including employee welfare and community development, were positively perceived but did not show a statistically significant link to financial outcomes. Similarly, governance structures, though rated highly in terms of transparency and compliance, did not significantly impact perceived financial performance. The study concludes that while ESG practices are gaining traction in Nigerian banking operations, their direct financial impact remains uneven at the branch level, with environmental initiatives emerging as the most influential dimension. It recommends deeper investment in environmental technologies, the establishment of robust ESG monitoring frameworks, expanded integration of ESG across departments, and stronger collaboration with regulators and investors to align sustainability practices with long-term financial stability.