In the light of the increasing awareness of the importance of sustainability and social responsibility, the implementation of Environmental, Social, and Governance (ESG) criteria has become an imperative for the financial sector, especially banks. This thesis explores how the application of ESG criteria affects the financial sector, with a special focus on the banking system, using ERSTE bank as an example. The goal of the thesis is to clarify what ESG in its application brings to the business of a particular company or investment. The research of current practices and regulations reveals the important role of banks in promoting economic activity that minimally impacts the environment, promotes social development, and ensures transparent management. Therefore, the ESG approach is not just a methodology for providing additional value to stakeholders; it is crucial for ensuring long-term sustainability and efficiency within the banking sector. The application of ESG criteria in the banking sector represents a strategic decision that has the potential to transform how banks operate, as well as the broader financial ecosystem. In the context of increasing stakeholder expectations and regulatory demands, banks that successfully implement ESG standards will not only improve their operational and financial performance but will also play a key role in promoting sustainable development on a global scale.