Business Competitiveness in Sustainable Finance: A Comprehensive ESG Performance Analysis of Top OECD Banks

This study examines business competitiveness in sustainable finance within the OECD banking sector, focusing on how Environmental, Social, and Governance (ESG) performance contributes to strategic positioning in a knowledge-based economy. As financial institutions operate in increasingly complex global environments, integrating ESG factors has become a critical managerial tool for enhancing competitiveness, fostering innovation, and strengthening institutional resilience. The study is framed within the perspective of management dynamics, emphasizing how banks adapt their strategies and capabilities to address sustainability pressures across diverse national contexts. The current literature emphasizes the growing importance of ESG performance in influencing financial outcomes, stakeholder trust, and long-term stability. However, most studies focus on single countries, rely on subjective weighting methods, or overlook cross-country comparisons. This creates a gap in understanding how ESG-driven competitiveness develops across different economies and how organizational strategies and knowledge-based resources impact sustainable banking performance. To address this gap, the study employs a multi-criteria decision-making framework integrating entropy-based weighting with the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS). Using Refinitiv ESG data from 2018 to 2023, the analysis evaluates 138 banks across 29 OECD countries based on five ESG dimensions: overall ESG score, shareholder score, CSR strategy, emissions, and resource use. This approach offers a comparative, knowledge-driven benchmarking framework for assessing sustainable competitiveness. The results reveal significant variations in ESG-based competitiveness across countries. Governance and strategic ESG indicators emerge as the most influential drivers of competitive advantage, while environmental dimensions remain unevenly implemented. These findings suggest that ESG serves as a strategic knowledge resource that shapes managerial decision-making and institutional performance. This study contributes by presenting an interdisciplinary, knowledge-economy-oriented framework for evaluating sustainable banking competitiveness. It provides cross-country insights supporting strategic management, sustainability transformation, and knowledge-driven policy design, thereby advancing research on management dynamics within the knowledge economy.