In the context of climate change, risks such as climate risk, or reputational and regulatory risks have become more material for businesses, and ultimately for financial institutions, as they reconsider their lending practices strategy. In this paper, I analyze how applying the ESG criteria in lending practices correlates with the credit risk metrics of their loan portfolio and how ultimately it translates into profitability metrics for financial institutions of 75 developing countries in six different regions. I find evidence of a positive relationship, between ESG performance and credit risk profile for financial institutions in the third ESG quartile*, and a positive relationship between ESG performance and profitability. Higher country sustainability is also positively associated with stronger credit risk and profitability. *Third ESG Quartile is defined as having an ESG score between 20 and 24, on a scale of 0-44 according to the ESG Index of financial institutions in the sample analyzed in this paper.