Building a Sustainable Future: The ESG Transformation in Indian Banks

Dr. G. Yamuna,

Assistant Professor, PG & Research Dept of Commerce, Dwaraka Doss Goverdhan Doss Vaishnav College, Chennai. yamunag@dgvaishnavcollege.edu.in

Miss. D. Priyadharshini

Research Scholar, Dept of Commerce, Dwaraka Doss Goverdhan Doss Vaishnav College, Chennai.dpriyadharshini412@gmail.com

Abstract
The Indian banking system has transitioned from nationalization to digitalization, contributing to the evolution of inclusive finance. In a dynamic financial world, Environmental, Social, and Governance (ESG) considerations are emerging as a critical framework for sound lending practices, moral governance, building stakeholder confidence, disclosing sustainability-related information, and responsible creation of long-term value. The study attempts to examine the ESG transformation of the top ten Indian banks (based on overall banking performance), and also examines the differences in the practices of public and private sector banks, with respect to the ESG approach. The study examines how banks are increasingly incorporating sustainability in credit decisions, operations, governance, and CSR. What should be noted is that E, S, and G are no longer perceived as a regulatory issue in India, but rather a strategic factor impacting the banking business in India. The analysis is based on both primary data from a structured questionnaire and secondary data gathered through banks’ annual reports and official databases. The results provide foundational insights and initial data for policymakers, bank practitioners, researchers, and contribute to the growing empirical research on sustainable finance, ESG integration, and responsible banking in India.

Keywords:  Environmental, Social and Governance (ESG); Sustainable Banking; Indian Banking Sector; Responsible Lending; Corporate Governance.