Measuring the Impact of Sustainability Accounting Implementation on the Financial Performance of Iraqi Banks: An Applied Study
Abstract
The performance of banks financial performance of banks and stability of emerging economy: a review This paper has thus also tested empirically on how sustainability accounting affects the financial performance of Iraqi banks. This paper investigated the effect of ESG- related disclosures and activities on financial performance measured using return on assets (ROA). This research used the ex-post facto research design and used data from 10 purposively chosen banks from 48 listed Iraqi banks based on sustainability accounting practices and data availability interpreted with criteria. Spanning the years 2015–2024, the analysis captured trends across a spectrum of economic cycles. Panel data regression analysis was used as longitudinal data provides more effective and efficient estimates which is done by pooling the cross sectional and time series data. The findings also demonstrate that sustainability accounting implementation such as Environmental, Social and Governance accounting Practice in Iraqi Banks had a significant and positive impact on financial performances measured by return on assets (ROA). This implies that banks which invest sustainably, that is, strive to protect the environment, endorse social responsibility and build strong governance are more likely to be profitable. The evidence supports the convergence of both sustainability accounting practice with better financial performance in the banks of Iraq. That is why this research suggests that Iraqi banks need to adopt ESG models as an integral part of accounting and reporting systems in order to control their sustainability effect and financial performance.
Keywords
Environmental accountingFinancial performanceGovernance accountingReturn
References
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