Abstract
This paper examines the impact of green banking disclosures on the quality of financial performance over thirty listed banks of the Dhaka Stock Exchange. Time-series data through the year 2014 to 2017 have been scrutinized, out of which we have selected 70 effective samples because of the availability of the green banking disclosures. Multivariate analysis has been conducted where the spending on green banking is used as a dependent variable, the proxy variables of green banking disclosures. As the independent variable of financial performance, we have used three dimensions: profitability, liquidity, and solvency. The ROA, LR, and DAR have been used as proxy variables simultaneously. We found that green banking disclosures and ROA have a considerable positive relationship. In contrast, the other two financial performance variables, LR and DAR, have no statistically significant relationship with green banking spending. The study's findings will encourage the highly profitable listed banks to invest more in greening their activities, ultimately leading to sustainable development in this sector.
Highlights
Since the 2008 Global Financial Crisis (GFC), banking authorities and policymakers have understood that the banking industry's long-term success is dependent on the smooth operation of financial systems and on the effective management of environmental hazards [31, 50]
There is a lack of literary work on the relationship between financial performance and green banking disclosures in Bangladesh
Our research model is stated below: GBP = α + β1 return on assets (ROA) + β2 LR + β3 DAR - μ Where, ROA = Return on Asset LR = Liquidity Ratio DAR = Debt to Asset Ratio
Summary
Global warming has gained much attention recently and is regarded as a phenomenon common to almost all countries This issue is mostly caused by irresponsible environmental treatment and reckless global industrial competition [49]. GHG emissions are blamed in many nations for altering natural ecosystems and creating severe repercussions [9], a global response is required [9] In this regard, significant progress has been made in recent years in terms of policy development and execution to focus on firms' environmental responsibility for GHG emissions, regardless of industry or country [2, 12, 47]. The Bangladesh Bank, the country's banking regulator, issued a series of initiatives known as the green banking guidelines in 2011, directing all commercial banks to adopt and implement this strategy in their daily operations [4].
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