Not necessary to overfocus on financial performance in strong Sustainability investing: evidence from a GABV Bank case study

A GABV bank is one from the Global Alliance for Banking on Values, an international network of 46 banks unique in their total commitment to sustainability in investing. In contrast to the usual model in which financial performance is objective one and sustainability is objective two, in a GABV bank, sustainable impact is objective one with only sufficient financial performance being objective two. By sustainable impact we mean focusing on companies that create positive change rather than only being satisfied with those that merely create no harm. Through a thorough analysis of a member of this alliance for which we have unique firm-level data, it is found that by focusing on portfolios of high sustainable impact, sufficient financial performance will tend to take care of itself on its own.