Transition towards green banking: role of financial regulators and financial institutions

PurposeThe purpose of this article is to study green banking practices, its methods of adoption and importance of practicing green banking. This study also includes the role and contribution of banks in environmental sustainability and UN Sustainable Development Goals.Design/methodology/approachThe current research paper is conceptual in nature, based on a thorough literature review, websites of financial institutions and literature evaluations among other sources. This study has been supplemented by a variety of research journal articles. The websites of many banks including SBI (State Bank of India) and MayBank (Malaysia) were used and reviewed to know about various green banking practices both nationally and internationally and their contribution toward sustainability.FindingsThe devastating effects of recent flooding, droughts and extreme temperatures that several people all over the world have experienced compelled everyone to begin thinking about global warming and its consequences, and to do everything that can be done to address this problem. Governments, businesses and individuals all play a part in preventing global warming and creating a more sustainable world. People have to deal with financial institutions, particularly banks, which play a vital role in this environment by assisting in the development of a robust and successful low-carbon economics. They should make more use of environmental data when extending credit and making investment decisions. The project will assist them in proactively improving their environmental performance while also adding long-term value to their company. Businesses having a bigger carbon output may be viewed as riskier in the future, and banks may shy away from funding such businesses in favor of innovative technology solutions that absorb or reduce carbon emissions. As a result, green banking is the order of the day, a source for sustainable development and it will undoubtedly benefit banks, industries as well as the environment at large.Research limitations/implicationsThe theoretical implications can be summed in the following points: (1) there is no universally accepted framework for green or sustainable banking so far. However, green banking practices are at different stages of development across countries. As per the case of India, green banking practices are at a development phase in India, and green processes have a significant impact on sustainable development. (2) The study is one of the first of its kind in the academic literature as it links green banking practices with sustainability besides discussing green banking practices of the top public sector Bank of India and top commercial bank of Malaysia. Despite the significant contributions made by this study, many disadvantages should be addressed for future research. The present work was chosen for comfort, it was restricted to green banking practices of two banks only, which limits conclusion and interpretation of outcome to some extent Future research can be conducted by a comparative study with the top green banks or with the cleanest country of the world or green banking practices by those banks toward sustainability in that country can also be a good area for researchPractical implicationsManagerial implication: The study is extremely helpful to the banking industry in determining the scope of green banking initiatives in sustainable development. This study is a prime study in India to interrelate banking industry towards sustainability and two UN SDGs besides green banking practices of banks. This paper has noted the areas where the banks can make progress for the greener, sustainable economics. It has also aided the banking industry in identifying areas for development so that it may focus on improving social satisfaction and satisfaction of stakeholders across its operating areas. The study is also very helpful for banks to comprehend how vital these green initiatives, especially green processes, are to improve sustainability.Social implicationsThe study will serve as a gauge for banking actions toward greener nations and a greener world since these are the efforts toward Carbon Free World, Efforts for controlling global warming, efforts for the greener planet in general which undoubtedly is a significant long-term service to society a reason for better climate and better tomorrow.Originality/valueThis paper identifies the need for green banking in sustainability. This article also summarizes the notion of green banking besides outlining some methods and analyzing green banking initiative by SBI (State bank of India) of India, MayBank of Malaysia & UNSDG .

Environmental degradation threatens survival of entire Global system. Global warming has been a national and international issue in recent years. Environmental challenges harm businesses directly and indirectly. Although several regulations to control pollution and protect the environment, they are not enforced, therefore we have failed to prevent environmental damage. So, all business policies focus on environmental issues. In a worldwide economy, regulators, governments, media, judiciaries, civil society organisations, and social activist groups are analysing industry and corporate environmental impacts and pressuring them to become greener. Hence, ethical regard for the environment is transforming global corporate sectors into green, ecologically friendly ones. The banking sector as a business sector is not excluded from this initiative. Consequently, encouraging environmentally friendly initiatives and prudent lending should be one of the financial industry’s obligations. Hence Banks and other financial companies are streamlining carbon emission reduction. Banks worldwide are investing in green strategy. These actions, part of a larger sustainable development plan, have created the concept of Green Banking. In the realm of finance, Green Banking is a relatively recent concept. It varies from conventional banking in that it considers environmental considerations while deciding whether to grant a loan. The green finance movement is young but expanding fast enough to replace fossil fuel investments. So, future demand for green financial products is expected to rise. In light of this, the present study compiled a list of a few global banks that have implemented Green Banking initiatives. Consumers are able to safeguard the environment and work to mitigate the effects of climate change while also doing their typical banking operations online. This research study is intended to analyse the various Green Banking Initiatives that have been implemented by a selected financial institution worldwide. The focus of the study has been narrowed down to five financial institutions from around the world that were actively engaging in green banking initiatives through their customers’ active participation namely Starling Bank, Treecard, Aspiration, bunq and Tomorrow and Green Banking Initiatives in Indian Scenario. The annual reports of the chosen financial institutions, sustainability reports, official websites of the concerned banks, and other sources are sorted through in great detail for the purpose of gathering data on the green banking activities initiated by these financial institutions.

Purpose The goal of this article is to investigate green banking and CSR practices, methods of adoption and the significance of practicing green banking and CSR for sustainable development. Design/Methodology/Approach The current study work is conceptual in nature, drawing on a thorough literature assessment, bank’s website and literature reviews among other sources. Website of Bank of Baroda was accessed and reviewed to learn about various green banking and CSR practices at the national level as well as their contribution to sustainable development. Findings Governments, businesses and individuals all play a role in building a more sustainable future. People must engage with financial institutions, particularly banks, which play an important role in this environment by facilitating the establishment of a strong and successful low-carbon economy. They should use more environmental data to offer credit and make investment decisions. The study will help them to proactively improve their environmental performance while also bringing long-term value to their business. Consequently, CSR and green banking have established themselves as standard operating procedures contributing to sustainable development that benefits banks, businesses and the environment at large. International Journal of Scientific Research in Engineering and Management (IJSREM) Volume: 08 Issue: 10 | Oct - 2024 SJIF Rating: 8.448 ISSN: 2582-3930 © 2024, IJSREM | www.ijsrem.com DOI: 10.55041/IJSREM37779 | Page 2 Research Limitations/Implications This study is particularly useful for the banking industry in assessing the breadth of green banking and CRS initiatives in sustainable development. Green banking is still in its early stages in India, yet it has a significant impact on sustainable development. The study links green banking and CSR practices to sustainable development while also investigating green banking practices at India's primary public sector bank. It identified areas where bank might make progress toward greener and more sustainable development. It also assists bank in realising the significance of green initiatives and CSR practices in enhancing sustainability. Despite the significant contributions made by this study, many limitations must be addressed in future research. The current study was chosen for comfort, it was limited to the green banking and CSR practices of Bank of Baroda which limits the conclusion and interpretation of the data to some extent. Future research may include a study and comparison of the top green banks or the world's cleanest countries. Originality/Value This study identifies the significance of green banking and CSR practices in sustainability. It also outlines the concept of green banking and CSR practices while defining certain methodologies and examining green banking and CSR initiatives by Bank of Baroda. Keywords Green Banking, Corporate Social Responsibility, Sustainable Development, Environment friendly, India

Concerns about environmental sustainability and climate change have prompted commercial banks to adopt green initiatives, such as dedicated "Green Funds" and eco-friendly products, to support sustainable development. Regulatory frameworks and stakeholder pressures are driving banks to integrate environmental responsibility and corporate social responsibility into their operations. Green banking is defined as integrating environmentally friendly practices, such as sustainable lending, carbon footprint reduction, and financing for renewable energy, into banking operations. Standard practices include funding eco-friendly projects and minimizing the bank's carbon footprint. These initiatives aim to align financial activities with ecological conservation and long-term economic stability. This study examines green banking practices across 10 commercial banks (5 public, 5 private) in Jaipur, India, focusing on their impact on banks' environmental Performance. A survey using structured questionnaires collected data from 161 bank employees (including branch managers, branch heads, relationship managers, and assistant managers) across all ten banks. Subsequently, correlation and regression analysis were conducted to assess the relationship between green practices and environmental performance indicators. The results reveal a statistically significant and positive impact of green banking on the environmental Performance of both public and private sector banks. Quantitatively, the regression model explains about 71.3% of the Variance in the ecological performance measure (R² =0.713), indicating that sustainability-oriented practices substantially improve outcomes. The major finding is that green banking initiatives alone account for roughly 71.3% of the variation in banks' environmental outcomes in this sample. Overall, these results highlight the strong empirical association between banks' green initiatives and their environmental Performance.

Green banking initiatives and sustainability: A comparative analysis between Bangladesh and India

The sustainable movement in the financial sector, known as green banking, has emerged as a global standard that obligates the financial industry to adhere to social and environmental responsibilities. Indonesian Islamic banks' green banking initiatives are examined in this study. Green Banking Disclosure Index (GBDI) indicators for 13 Islamic commercial banks were collected from their five-year sustainability reports. Bose et al. (2018)'s 21 GDBI indicators were thoroughly analyzed. Jeucken's typology measurement showed banks' four-stage movement from defensive and preventative to aggressive and "sustainable" in 2004. Jeucken's Typology of Banking and Sustainable Development functioned as the assessment framework for evaluating green banking performance. Among the 13 Islamic banks analysed, only six have chosen to publicly disclose their sustainability reports. The banks in question include Panin Dubai Syariah Bank, Muamalat Bank, Aladin Syariah Bank, Aceh Bank, BTPN Syariah Bank, and Mega Syariah Bank. The data reveals that no Islamic banks have reached the "sustainable" stage. Currently, two out of six Islamic banks are positioned in the offensive stage, while the other four are in the preventive stage. It can be posited that these financial institutions have commenced the shift towards a "sustainable" phase. The findings of this study on disclosure indicators in green banking indicate that Indonesian Islamic banks must revise their reporting methods concerning environmentally friendly banking practices. Moreover, considering their crucial role in advancing green banking in relation to sustainable development, Indonesian Islamic banks need to enhance the quality of their publicly accessible sustainability reports.

Sustainability is now at the forefront of organisational agendas, especially in the financial sector, due to the increasing urgency with which climate change and environmental degradation must be addressed. Green human resource management, or GHRM, has become a key tactic for encouraging ecologically conscious business practices. The study, "Fostering Environmental Responsibility: HRM's Role in Green Banking Initiatives in India," explores the ways in which GHRM practices support sustainability in the Indian banking industry, particularly in the country's public and private banks. The three main goals of the study are to: (1) evaluate the HRM strategies used in green banking to advance sustainability; (2) assess how these strategies affect employee involvement and engagement in green banking initiatives; and (3) look into the relationship between green HRM strategies and the success of green banking initiatives. Through personal outreach and the distribution of structured surveys via Google Forms, information was gathered from 200 banking experts. A variety of banking staff members were surveyed using a non-probability sample technique that combined convenience and snowball sampling to get their opinions. The results show that good green banking outcomes are strongly and favourably correlated with green recruitment and selection as well as green documentation. These findings highlight how crucial it is to incorporate environmental values from the very beginning of the employee lifetime and to uphold responsibility and transparency through organised documentation procedures. The requirement for comprehensive organisational support and efficient implementation frameworks is shown by the indirect influence of eco-friendly policies and green training, even though their direct effects were not statistically significant. Additionally, the study finds a strong link between employees' active participation in green banking operations and their awareness of green practices. This demonstrates how important communication and awareness-raising campaigns are in developing a workforce that is dedicated to environmental responsibility. It's interesting to note that the gender-based research shows no discernible disparities in attitudes, indicating that green HRM practices are being spread equally and inclusively across genders. The study concludes by urging a thorough, inclusive, and strategic approach to GHRM and highlighting its critical role in ensuring the success of green banking projects. In addition to providing useful information for HR and policy leaders in fostering ecologically conscious banking cultures, the study adds to the expanding corpus of research on sustainable banking.

Green banking initiatives differs from the banking technology growth in India. It focus on promoting initiatives of public and private sector banks. The objectives of the present study is to understand the usage of green banking initiatives and comparative analyse of green banking initiatives in public and private sector banks. This research study found that there is no significant associated between initiatives taken by the public and private sector banks. The study also found private and public sector banks are less emphasized on core banking system and awareness of green banking initiatives. The study found that banking system for completely through the online based services. The main purpose of green banking initiatives is to reduce time and cost of the customers and involves the more activities of the banking initiatives.

This paper aims to explore the emergence of ‘Green Banking’ in Bangladesh, with a focus on the role of financial regulation and regulators in greening the financial sector. It also examines the contribution and involvement of banks and non-bank financial institutions in promoting green economic transition. The study is based on the review of secondary data collected from various sources, such as quarterly reports, annual reports, websites of the central bank of Bangladesh, and other commercial banks and non-bank financial institutions as well as various articles, and newspapers reports on green banking in Bangladesh. The collected data is reviewed using descriptive statistics. The research results reveal that the central bank of Bangladesh played a major role in greening the financial system of the country by implementing various green policies and regulatory measures. Although Bangladesh is still far behind the developed countries in terms of environmental performance, the country has made a remarkable progress in initiating and expanding green banking practices, infrastructure development, and accelerating green growth in recent years.

The object of green banking initiatives is developed in recent times with the innovative ideas and growth of banking sector. The banking sector vital role of changes and growth for private sector banks in the environmental protection and sustainable development. This study concern that recent development of private sector banks in the southern districts of tamilnadu. This paper analysed that different age groups and educational status customer’s usage and awareness of green banking initiatives in the private sector banks in study area. It intends to developed initiatives for awareness of customer’s use of private sectors. It find out the green banking initiatives in encouraging the environmental protection and awareness of the customers. Finally, this study encouraging and awareness of green banking initiatives in customers and providing training for to get into use for green banking services.

Asian countries have been contributing significant in green initiatives. In addition to Thailand, India and Indonesia are also able to get ranking among top five countries for Solar Water Collector and Bio Diesel Production respectively. The financial institutions including banks are also expected to promote environment friendly initiatives and promote socially responsible investment with higher earnings. Green banking is not just motivating online banking to save resources and environment but it is an umbrella term which includes various practices adopted by banks and guidelines meant for sustainable economic, social and environment dimensions. Nepal is a small country and also progressing towards development despite all infrastructural challenges at domestic level. The present study is destined to scrutinize the awareness level of customers regarding Green Banking and to study the overall understanding of the customers regarding Green Banking initiatives and practices followed by banks in Nepal. That's why a descriptive research design has been followed in the present study to know the awareness and perception of customers regarding Green Banking. It is interesting to find that even having reduced level of understanding of overall concept of “Green Banking”, it has been identified that the customers are agreed that “Green Banking” initiatives are necessary for environment conservation and sustainable growth in future.

The banking sector plays a strategic role in advancing sustainable business practices through green banking initiatives, which reduce environmental risks and enhance banks’ reputations amid growing global concerns about climate change. This study examines corporate governance and sustainability performance in Islamic banks, with green banking as a mediator. The data were collected from 158 middle and upper management employees in Islamic banking institutions in South Sumatra, Indonesia. This study used mediation path analysis to assess the effect of corporate governance on sustainability performance directly and through green banking practices indirectly. The results confirm a positive relationship between corporate governance framework and sustainability performance in Islamic banks, suggesting that strengthening governance structures directly improves sustainability outcomes. Moreover, green banking practices partially mediate the nexus between corporate governance and sustainability performance, indicating that corporate governance indirectly improves sustainability performance by promoting green banking initiatives. These findings show the necessity of aligning corporate governance frameworks with green banking initiatives to achieve long-term sustainability goals in Islamic banking.

Green banking is a concept that refers to practices and principles that make financial institutions profitable, environmentally friendly and healthy. Its aim is to make banking processes and the use of IT and physical infrastructure as efficient and effective as possible with zero or minimal impact on the environment. Green banks are developing technology in the banking sector, increasing efficiency and changing the customer experience. This is a smart and thoughtful way with a vision for the future. Banking operations are not physically dependent on the environment, but are driven by external influences on the core activities of customers. Green banks are different from conventional banks. Their main aim is to promote environment friendly businesses. Green banking refers to banking operations that are compatible with reducing internal and external carbon emissions. The aim of this study is to understand the use of green products in the banking sector and to analyze the green financial measures adopted by government and private banks. The study is based on primary data collected by 136 respondents from various public and private banks in Uttar Pradesh. The study revealed no correlation between various measures taken by private and public sector banks in implementing green finance. The study also disclosed that private and public sector companies are relying less on banking solutions and are using e-waste management to implement good environmental practices. The study presented that 100% of public and private banks use internet and mobile banking. The main aim of green banking is to minimize customer time and costs and impact the principles of sustainability, ethical lending, maintenance and energy efficiency.

Following the global footsteps, the COVID 19 pandemic encouraged the adoption of e- banking practices, as a part of green initiatives. In this perspective, green banking practices have become very significant in public and private sector banks. Public sector banks account for roughly 70 per cent of the total deposits in India. In this article, an attempt has been made to study the present scenario of green banking in India with special reference to select public sector banks. Green banking along with active participation of all the related stakeholders could help in reviving the pandemic-stricken Indian economy, keeping the sustainability goals intact.

Green banking has become increasingly significant in India as financial institutions incorporate environmentally responsible practices into their operations. This research investigates green banking initiatives and assesses the degree of their implementation among Indian banks using a comparative framework. The focus is on identifying essential green banking practices, including digital banking services, paperless transactions, green financing, energy-efficient operations, and sustainability disclosures adopted by banks in India. A Green Banking Adoption Index (GBAI) has been created to evaluate and compare the level of green banking practice adoption across various banks. This index is formulated using selected indicators that reflect the primary dimensions of green banking, allowing for a systematic evaluation of adoption levels. The study utilizes secondary data obtained from publicly accessible bank reports, sustainability disclosures, and official publications. A comparative analysis is conducted to explore differences in green banking adoption among banks. The analysis uncovers notable disparities in the adoption of green banking practices among Indian banks. While certain banks exhibit a higher degree of integration of green initiatives, supported by structured policies and disclosures, others display comparatively lower levels of adoption. The findings suggest that although green banking practices are gaining traction in India, the extent of their implementation is inconsistent.