Abstract
Every sector of the global economy is faced with environmental problems and their resulting consequences to their day-to-day operations. Due to the rising threat of global climate change, the green banking (GB) concept has been given significant attention in recent green finance literature. Therefore, the main purpose of this study was to identify the impact of GB practices on banks’ environmental performance and sources of green financing of private commercial banks (PCBs) in Bangladesh. Using a survey method, the primary data were obtained from a cross-sectional sample of 322 banking employees of PCBs in Bangladesh. In order to identify the key relationships existing between the study variables, structural equation modelling (SEM) approach was employed. The empirical findings indicated that banks’ employees, daily-operations, and policy-related GB practices have significant positive effects on green financing, contrary to banks’ customer-related GB practice, which was not statistically significant. Additionally, banks’ green project financing exhibited a strong and positive influence on banks’ environmental performance. Moreover, banks’ daily operation and policy-related practices of GB were observed to have significant impacts on banks’ environmental performances, in contrast to banks’ employee and customer-related GB practices. Therefore, major policy implications and directions for future research in the concerned area are discussed.
Highlights
In a bid to enhance the economy and maximize wealth, humans continue to engage in activities that are detrimental to the environment
This study contributes to the existing literature, especially on green banking (GB), green finance and banks’ environmental performance, in the following ways: First, the current study explores the research gap by analyzing the various GB practices theoretically and empirically based on bankers’ knowledge of Bangladesh’s banking sector
The empirical finding section covers the demographic profile of the respondents, descriptive statistics, reliability and validity of constructs, followed by the measurement model, structural equation modeling, and the outcomes of the research hypothesis
Summary
In a bid to enhance the economy and maximize wealth, humans continue to engage in activities that are detrimental to the environment. The world is faced with the challenges of climate change, such as floods and heat waves [1]. Concern for environmentrelated issues is increasing globally and, recently, among enterprises and institutions, leading to the development of various means of evaluating it. Peacock Climate Management Award’, while the ‘Global Green Economy Index’ and many other evaluation indexes are utilized to rank the global economies. Climate change remains one of the biggest problems facing both developed and developing countries in the world [3]. As most developing countries are in the transition period for economic and social development, they are, on the one hand, very vulnerable to climate change and, on the other hand, dependent on global climate finance to support climate protection and mitigation programs. Many developing nations, such as Bangladesh, are struggling to reap this benefit due to their lack of effective institutions with project design and planning expertise [1,3]
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