📄 Abstract
The global financial system is undergoing a structural transformation as sustainability becomes a central concern for businesses, investors, and regulators. ESG has emerged as a framework to evaluate corporate behavior beyond traditional financial performance. It measures how organizations manage environmental responsibilities, social relationships, and governance structures. Banks play a crucial role in economic development by allocating financial resources across sectors. Historically, lending decisions were driven by financial indicators such as revenue growth, repayment capacity, liquidity position, collateral value, and credit scores. However, exclusive reliance on financial data has proven insufficient in predicting long-term borrower sustainability. Major corporate failures, environmental disasters, and governance scandals have demonstrated that non-financial risks significantly affect financial stability. As a result, banks now incorporate ESG parameters to assess long-term borrower viability and ethical risk exposure.
📚 How to Cite:
Avika Dixit, Rashmi Tripathi , ROLE OF ESG FACTORS IN BANKING LENDING DECISIONS , Volume 13 , Issue 3, March 2026, EPRA International Journal of Environmental Economics, Commerce and Educational Management(ECEM) ,