The effects of economic, environmentally and socially related SDGs strategies of banking institutions on their customers’ behavior

Abstract

The financial sector is considered either directly or indirectly responsible for a number of economic, environmental and social problems. Although this view has been long held, it became especially so after the financial crisis of 2008 when the sector was heavily blamed for economic and social problems. To address such problems, banking institutions have adopted sustainability and CSR management practices, while also recently approached such practices through the 17 Sustainable Development Goals (SDGs) set by the United Nations. These practices, in addition to fulfilling the banking sector's duty to society and economy, should also be a good sign to customers who want to reward banks with better performance in the SDGs. This article examines the effects of SDG practices of banking institutions on their customers. By utilizing a PLS-SEM technique, a conceptual model has been developed to describe the potential relationships between customers and the banking institutions that adopt the SDGs. This model was tested by utilizing a sample of 980 customers of Greek banking institutions. The findings show that economic and socially related SDGs had an impact on bank customers trust, fair pricing, image and loyalty.