This study investigates the relationship between Environmental, Social, and Governance (ESG) risk and the financial performance of domestic banks in Taiwan, with a focus on the moderating role of family ownership. Using data from 38 banks between 2018 and 2023, this research examines how ESG risk affect key financial performance indicators. The results show that ESG risk have varying impacts on financial performance. Our study further highlights that the resilience of Family owned banks to ESG risk is more pronounced, as their long-term strategic focus and conservative management enhance financial stability. However, the mitigating effects of family ownership on ESG risk are not uniform across all financial indicators. Our research contributes to the understanding of ESG risk in financial institutions and provides valuable insights for investors, and bank managers. It emphasizes the critical need for banks to enhance ESG risk management and adaptability, aligning their practices with sustainable development goals and regulatory demands in an evolving financial landscape.