Green banking: a conceptual framework

Abstract

The purpose of this study is to develop a multidimensional framework for Green Banking Adoption. The study proposes the Green Banking Adoption based on the Natural-Resource-Based View (NRBV) of the firm. The first-order constructs in the framework have been derived from the three green capabilities in NRBV of the firm. These reflective constructs lead towards the second-order construct of Green Banking Adoption. The proposed framework is developed and justified on a theoretical basis and through secondary data. This paper develops the second-order construct of Green Banking Adoption in congruence with the NRBV capabilities i.e. pollution prevention, product stewardship and sustainable development. The framework proposes a pathway for the adoption of Green Banking. The analysis and discussion are based on various examples of the adoption of the proposed indicators by existing Green Banks. This framework can serve as a benchmark for gauging a bank's progress along the Green Banking Adoption paths. The discussion reveals that the proposed green constructs can create a reflective relationship with Green Banking Adoption by undertaking a phase-wise adoption path. The propositions are based on existing industry standards and best practices by industry leaders.