The Impact of CSR and Green Banking Practices on the Financial and Risk Sustainability of Commercial Banks in Bangladesh

This study examines the impact of Corporate Social Responsibility (CSR) and green banking practices on the financial and risk sustainability of commercial banks in Bangladesh. Using panel data of 300 observations over the period 2013 to 2024, this study employed random effects regression models to assess how CSR and green banking influence profitability, financial stability, and risk exposure. A System GMM model is additionally used to address endogeneity concerns and validate the robustness of the results. The empirical findings indicate that CSR engagement by banks contributes positively to financial performance with superior shareholder returns. This positive relationship remains robust under the GMM framework. CSR also shows a significant negative association with non-performing loans, which becomes stronger after controlling for endogeneity. Green banking practices also exhibit a positive and statistically significant relationship with ROE under the baseline model. However, this relationship becomes statistically insignificant in the GMM estimation, indicating that the effects of green banking are sensitive to endogeneity.