Impact of Strategic Financial Planning, Risk Management, and Investment Diversification on Sustainable Performance: A Quantitative Analysis in the Banking Sector

Abstract

The objectives of this study are to examine the impact of strategic financial planning, risk management and investment diversification on sustainable performance in the context of the banking sector. Using a quantitative approach data was gathered through a survey from banking professionals in Pakistan. Relationships between variables are analyzed using the Partial Least Squares Structural Equation Modeling (PLS-SEM) method. Findings indicate that all three factors, strategic financial planning, risk management and investment diversification, have a positive impact on sustainable performance and that strategic financial planning has the most significant impact. Meanwhile, investment diversification is essential to the finance sustainability when it is aligned with green investments; and risk management is also essential to the sustainability of banking operations. Finally, the study advises banks to incorporate sustainability into their financial planning and decision making. The insights of this thesis contribute both to the academic literature and to practical banking strategies, underlining the importance of sustainable finance as a path to long term growth and resilience.