The Current Landscape of ESG Adoption in U.S. Banking Institutions

This study examines the evolution of ESG adoption in the U.S. banking sector by integrating regulatory developments with empirical evidence from S&P Global ESG scores for more than 200 commercial banks over the 2014–2024 period. The analysis highlights how major policy milestones, such as the TCFD recommendations, net-zero commitments, the Interagency Climate Principles, and the SEC’s 2024 Climate Disclosure Rule, have reshaped disclosure expectations and influenced ESG scoring trajectories. Using trend analysis and cross-sectional comparison, the study identifies a persistent performance gap between Global Systemically Important Banks (G-SIBs) and regional banks, with G-SIBs exhibiting stronger ESG outcomes driven by superior governance structures and more advanced reporting capacity. While regulatory tightening initially exposes data gaps and leads to short-term declines in ESG scores, it ultimately supports more consistent climate-risk management and improved sustainability practices. The findings offer timely insights into the uneven progression of ESG integration within U.S. banking.