IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/v16y2026i2id22442.html

ESG Integration and Cost Efficiency Assessment: Evidence from GCC Banking

Author

Listed:
  • Aldousari, Abdullah

    (Aberystwyth University, Aberystwyth, Wales, United Kingdom.)

Abstract

This research examines the impact of Environmental, Social, and Governance (ESG) factors on cost-efficiency in GCC commercial banks over the period 2018-2022. The analysis employs a two-step Stochastic Frontier Analysis (SFA), followed by panel data Generalized Least Squares (GLS) regression, and covers a sample of 48 banks. Baseline results indicate that environmental and governance factors are associated with higher cost inefficiency, while social factors have no significant effect. Further analysis reveals that social and governance factors become efficiency-enhancing under strong institutions. ESG initiatives increase costs in the short to medium term when ESG scores are low, unless they are strategically integrated into core operations. Inefficiency also arises with higher NPLs, capital reliance and weaker governance during the COVID-19 crisis. This research highlights the context-dependent effects of ESG practices on bank efficiency in the GCC region.

Suggested Citation

  • Aldousari, Abdullah, 2026. "ESG Integration and Cost Efficiency Assessment: Evidence from GCC Banking," International Journal of Energy Economics and Policy, Econjournals, vol. 16(2), pages 96-104, January.
    • Handle: RePEc:eco:journ2:v:16:y:2026:i:2:id:22442
    DOI: 10.32479/ijeep.22442
    as

    Download full text from publisher

    File URL: https://econjournals.com/index.php/ijeep/article/download/22442/9743
    Download Restriction: no
    File URL: https://libkey.io/10.32479/ijeep.22442?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:v:16:y:2026:i:2:id:22442. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Monica Sinhat (email available below). General contact details of provider: https://econjournals.com/index.php/ijeep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.