We examine the relationship between environmental, social, and governance (ESG) activity and bank value. Our sample includes 251 banks over the period 2011–2017 from 44 emerging economies. We employ System Generalized Method of Moments (GMM) estimation to control for endogeneity. We find a non-linear relationship between ESG activity and bank value. Our results indicate low levels of ESG activity positively impact bank value. However, there are diminishing returns to scale. Environmentally friendly activities have the greatest effect on bank value. We examine the channels through which ESG activity impacts bank value and find a positive relationship between ESG activity and both cash flows and efficiency. We find ESG activity negatively affects the cost of equity but has no effect on the cost of debt. Our results explain why proponents of both stakeholder theory and trade-off theory have found evidence to support their predictions of the relationship between ESG activity and bank value.

我们研究了环境，社会和治理（ESG）活动与银行价值之间的关系。我们的样本包括2011-2017年期间来自44个新兴经济体的251家银行。我们采用系统广义矩法（GMM）估计来控制内生性。我们发现ESG活动与银行价值之间存在非线性关系。我们的结果表明，低水平的ESG活动会对银行价值产生积极影响。但是，规模收益递减。环保活动对银行价值的影响最大。我们研究了ESG活动影响银行价值的渠道，并发现ESG活动与现金流量和效率之间存在正相关关系。我们发现，ESG活动会对权益成本产生负面影响，但对债务成本没有影响。