SUSTAINABILITY AND GREEN BANKING PRACTICES: UNDERSTANDING THE STRATEGIC CONVERGENCE IN NEPALESE BANKS-SEM APPROACH

Abstract

ABSTRACT Banking industry is never considered as a polluting industry, however, the present scale of banking operations has considerably increased the carbon footprint of banks due to their massive use of energy, high paper wastage, lack of green building, green project investment etc. To aid the reduction of external carbon emission, banks should finance green technology and pollution reducing projects. The banks operation should be emphasized on green banking activities conducted in such area and in such a manner that helps the overall reduction of external carbon emission and internal carbon footprint. Therefore, banks should adopt technology, process and products which result in sustainable reduction of their carbon footprint as well as develop a sustainable business. Green banking as a concept is proactive and smart way of thinking with a vision for future sustainability of our only spaceship earth. The major objective of this study was to understand the relationship between green banking and sustainability of Nepalese banks. The factors of green banking considered were green product/services, risk management, green investment, green banking strategies and green human resource management. This study undertakes quantitative approach towards descriptive and causal research design. SEM analysis was adopted to examine the hypotheses. A sample of 350 employees were considered for the study. However, 309 questionnaires were returned and used in this research. The study’s findings indicated that all the dimensions of green baking practices have significant relationship with sustainability of banks in Nepal. Thus, offering environmentally products that combine social concern along with encouraging projects. This takes care of sustainability and use of renewable resources and focusing on green investment by keeping the annual targets, strategic plan and budget at the relevant activities helps in sustainability of Nepalese banks. It is concluded that Nepalese banking organizations has a huge potential for the green banking practices. If these banks turn their focus toward the sustainability, it would be beneficial for the risk diversification of banks as well as development of the country. So, it can be concluded that green banking helps in sustainability of banks. Keywords Green Banking, Nepalese Banks, Sustainability, Banking Industry, Green Banks