ESG PERFORMANCE AND FIRM PROFITABILITY: EVIDENCE FROM JORDANIAN BANKING SECTOR

Abstract The profitability is the success key for any intuitions, it’s the valuable element used to measure the company’s performance, being the center focus all the time by managers, governments, supplies and other stakeholders. Therefore, this study will explore how the combination of the Environmental, Social, and Governance (ESG) principles impact the profitability of the Jordanian banking sector by using quantitative scores methods, the profitability of this study will use (ROE, Tobin's Q), all the data of this study gathered from sustainability reports and annual reports of Jordanian banks. The findings revealed a significant positive correlation between ESG performance on financial performance. However, the main result of this study higher ESG performance especially stronger governance is positively and significantly associated with firm profitability (ROE and Tobin’s Q), with governance and bank-level digital integration delivering the largest and most robust gains. Other variables, including firm size, debt ratios, and CO2 emissions, significantly impacted on ROE and Tobin’s Q.