MULTIDIMENSIONAL ASSESSMENT OF FINANCIAL RESULTS OF COMMERCIAL BANKS USING ESG FACTORS

Abstract

The study presents innovative approaches to assessing the financial results of commercial banks in the Republic of Armenia, which combine Environmental, Social, Governance (ESG) factors, reporting transparency and integrated risk analysis. The paper proposes a new assessment format, where the calculation of financial results is supplemented by mechanisms, that respond to profit distribution efficiency, external and internal influences, and ESG operational and structural risks. An adjusted calculation of capital adequacy with the inclusion of the ESG multiplier, ESG-RWA methodology, as well as a “green rating” system for classifying borrowers and partners have been developed. The study also presents the ESG-KPI internal reporting dashboard and a system of qualitative controllable indicators for the regulator, which improves the assessment of financial stability and ensures strategic monitoring of risks.