ESG maturity assessment of the largest euro area banks

Purpose This paper aims to assess the maturity of environmental, social and governance (ESG) integration within the institutional logic of 29 systemically significant euro area banks and examine how it is translated into governance and management systems. It investigates whether this alignment reflects a far-sighted transformation or just symbolic conformity driven by institutional pressures. Design/methodology/approach Grounded in institutional theory, the authors use a qualitative document analysis of 2024 annual reports and evaluate the scope of ESG integration across five categories: materiality assessment, strategic integration, ESG risk management, ESG outcome and reporting and stakeholder engagement. Findings Our results reveal a fragmented ESG maturity. While coercive pressures have advanced ESG risk management and ESG outcome and reporting, stakeholder engagement remains the least mature dimension. This study identifies a non-linear size effect, with a “complexity trap” among the largest banks and a maturity “sweet spot” among mid-sized banks. Research limitations/implications Theoretically, the paper extends institutional theory by demonstrating that bureaucratic complexity, rather than resource abundance, determines the substantive depth of ESG integration. Limitations include the focus on large banks and the reliance on self-reported data. Practical implications The proposed diagnostic tool enables managers and regulators to benchmark ESG integration beyond checklist compliance, address greenwashing risks and support alignment with the United Nations sustainable development goals. Originality/value The paper introduces a granular ESG maturity framework that conceptualises how isomorphic pressures translate into divergent organisational outcomes and explains the persistence of decoupling in the banking sector.