Sustainability Orientation Paradox: Do Banks Ensure Strategic Sustainable Development?

In this study, we examine banks’ sustainability orientations (SOs) in the Baltic region, focusing on how institutional, stakeholder, national culture, and leadership factors influence strategic alignment with the Sustainable Development Goals (SDGs). We assess how Baltic banks integrate sustainable development using a bibliometric review, financial performance analysis, Spearman’s rank correlation, and content analysis of sustainability-related disclosures for 2023, and interpret Hofstede’s cultural dimensions of the Baltic countries alongside these results. Our bibliometric review reveals limited research on SO and SD in banking, with a gradual annual increase of 14.8%. Our content analysis findings suggest that smaller banks are more broadly aligned with the SDGs; however, 36.4% of the largest banks in the region did not have a dedicated sustainability report a year before ESRS and CSRD requirements became mandatory. Notably, the reporting approach shows no statistically significant correlation with assets, size, global/local coverage, or the number of aligned SDGs. Furthermore, our content analysis findings reveal a persistent sustainability paradox: while economic and environmental goals are strategically prioritised, social SDGs are significantly underrepresented. We propose that this reflects a lack of demand for socially sustainable development rooted in regional contexts and national culture, which shape SO and organisational and leadership responses.