Sustainable Banking Research Articles

Analisa Faktor Yang Mempengaruhi Financial Sustainability Ratio Sektor Perbankan Di Bei Periode 2019-2022

Financial Sustainability in banking is one of the important things to measure the bank's sustainability in the future, especially from a financial perspective. The sustainability of the banking sector must be a concern because there are many parties who will have an impact if a bank experiences failure to operate, especially in its finances. This research aims to examine the influence of BOPO, DebtToEquity, ReturnOnAsset, LDR, Directors, Commissioners on the Financial Sustainability Ratio (FSR) in Idx banking sector companies -Ic Period 2019-2022. Sampling was carried out using purposive sampling technique. This type of research uses multiple linear regression methods. The object of this research is the Idx-Ic banking sector financial report for the 2019-2022 period. The research results show that only the Director variable of the six independent variables used has an influence on the Financial Sustainability Ratio (FSR) and the research model is suitable for use. Companies that want to maintain the FSR value should pay attention to the number and selection of directors they have.

Sustainability and the domestic credit market: worldwide evidence

This paper aims to uncover the cross-sectional relationship between country-level sustainability performance and the domestic lending activity of commercial banks. Considering a worldwide sample of countries, it uses publicly available sustainability scores from SolAlability Sustainable Intelligence, macroeconomic data, and banking sector data from the World Bank. The results show that the country’s sustainability performance is positively related to the amount of domestic credit granted by banks to the private sector and negatively related to the importance of nonperforming loans. Moreover, looking at the pillars that constitute the sustainability scores, this work finds evidence that social cohesion, intellectual capital, and governance are the pillars of sustainability that affect domestic lending activity. Results survive several robustness tests concerning samples, variables’ definitions, and estimation procedures. Our results suggest that policies aiming at improving a country’s sustainability contribute to domestic banking sector stability and financial development. Specifically, measures that contribute to social cohesion and solidarity, innovation and value-added industries, and the country’s governance performance, contribute to the smooth functioning of credit markets.

Impact of Corporate Social Performance on Financial Performance: Evidence from Islamic Banks, Conventional Banks and Social Banks

Purpose — This study aims to assess the impact of banking models on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) in determining a viable model for sustainable banking. Design/Methodology/Approach — The study uses a cross-country sample of 117 financial institutions across 36 countries over an 8-year observation period between 2013 and 2020. To address heterogeneity and endogeneity issues, the authors use the System Generalised Methods of Moments (GMM) estimation models. The study also constructs a novel CSP Index as the independent variable for the research. This CSP Index comprises six indicators reflecting dimensions of financial inclusion and intermediation, serving as proxies for sustainable banking. Findings — The findings reveal that the distinct banking models have a significant impact and can alter the direction of the CSP-CFP relationship. Specifically, the conventional banking (CB) model exhibits a statistically significant negative association between CSP and CFP. Conversely, the Islamic banking (IB) model emerges as a promising avenue for sustainable finance, indicating that increased corporate social responsibility (CSR) activities within Islamic banks (IBs) lead to greater profitability. This difference arises from the inherent strengths of the IB system in conducting financial intermediation and inclusion activities. This contrasts with the CB model’s reliance on debt-based instruments, which exacerbates risk and detrimentally impacts financial performance. The findings also show that the social banking (SB) model has a significant effect on the CSP-CFP relationship. Originality/Value — The findings give new insights into the longstanding debate on the CSP-CFP relationship by examining the impact of banking models. Introducing a novel CSP Index, characterised by its objectivity and verifiability, addresses the prevalent issue of bias inherent in the CSP indices of previous studies.

IMPLEMENTASI PELAKSANAAN RESTRUKTURISASI PEMBIAYAAN BERMASALAH DALAM UPAYA SUSTAINABLE BANKING DI BANK SYARIAH INDONESIA

This research aims to determine the implementation of restructuring of problematic financing and whether the implementation of restructuring can strive for sustainable banking. This research uses a descriptive method with a qualitative approach. The author collected data using observation, interviews, and documentation methods from three informants in the Marketing Division, with the research location at Bank Syariah Indonesia KCP Bekasi Square. The results of this research show that: 1. The implementation of the restructuring of problematic financing that Bank Syariah Indonesia KCP Bekasi Square has carried out is effective as a form of rescue for problematic financing customers. OJK's restructuring policy is the best step in dealing with problematic financing. 2. The implementation of restructuring to sustain banking has had a very positive impact, such as the bank's performance becoming healthy and the portfolio and customer collectibility returning to normal by integrating environmental, social and governance criteria. This restructuring implementation can support sustainable banking at Bank Syariah Indonesia KCP Bekasi Square.

The Benefits of Sustainability Integration in Banking

Abstract This study investigates the way banks choose to implement sustainability, and shows the advantages and challenges that this integration brings. We used a methodology that combined bibliometric analysis and case studies that included the integration of sustainability in different banking institutions. What was observed as a result of the study is that a correct adoption of the principles of long-term sustainability have multiple benefits: - increasing operational efficiency - improving the image of banks; positive impact on society and the environment. Through this research we hope to add to the specialized literature, coming with clear evidence that the banking environment can contribute with a positive impact on sustainability. The decision-making factors in the management and the board of the banking institutions use these evidences as information that can later be transformed into performance indicators, indicators that will contribute through their results to encouraging the implementation of sustainable development within the banks. We know that the future comes with climatic challenges, or precisely a sustainable banking strategy that includes the analysis of all risks can generate a balance sheet behind anticipated. This integration of sustainability in the banking sector encompasses environmental, social and governance (ESG) principles; ESG has gained increasing attention in recent years. "Sustainable economic development has become an important factor on the agenda of various economic and business institutions, so banks and financial institutions are also an essential part of this trend" (Tarkhanova, 2018). Case studies from real institutions are included to exemplify successful implementations (BNP PARIBAS Personal Finance). Although it faces challenges and obstacles, the banking sector has much to gain by adopting sustainability from a social, corporate governance and economic perspective.

The mediating role of stakeholders on green banking practices and bank's performance: The case of a developing nation.

The banking sector serves as a nudge between increased financial investments and reduced environmental impacts in the modern era of sustainability thus, integrating the social, environmental, and economic dimensions. This paper aims to explore the practices and ongoing activities on account of sustainable banking which is being practised in the Pakistani Banking Sector. A mixed methods approach using a survey with a sample size of (n = 250) and in-depth interviews of (n = 25) provides significant evidence for the research. SmartPLS4.0 was used for hypotheses testing and to ascertain the path coefficient association within the constructs. This research fills the gap in existing literature by testing and implying the mediating role of Stakeholders' Influence on the relationship between Green Banking Practices and the Bank's Performance. The results of the quantitative analysis show a positive association between variables, highlighting the role of stakeholders and their need to partake efficiently, in the countrywide execution of green banking. The qualitative analysis portrays that; green banking is currently the partial focus of the banking sector in the developing economy of Pakistan whereas, approaches like financing green projects, investments in renewable energy, in-house greening of the banking sector, and provision of easy lending facilities to encourage and support environmental initiatives are some commonly practised accomplishments of the banking sector.

Fintech's influence on green credit provision: Empirical evidence from China’s listed banking sector

We explore the impact of financial technology (fintech) advancements on green credit provision, investigating publicly traded banks in China from 2007 to 2022. We particularly focus on credit modelling innovation, examining the non-linear dynamics between fintech evolution and green credit distribution. Results reveal a positive U-shaped correlation. Initial stages of fintech are associated with increased green credit risk, negatively affecting the volume of green credit. However, more established fintech infrastructures significantly enhance green credit volumes by improving resource allocation and credit risk assessment. Utilizing a multiple linear regression approach, we highlight the transformative nature of fintech in advancing sustainable banking practices, particularly through innovations in credit modeling that enhance green credit risk management and resource allocation efficiency.

Green Banking Initiatives: Policy and Practices in Commercial Banks of Nepal

Environmental and social (E&S) risk management has grown in key aspects of sustainability in banks and other financial institutions these days. A socially inclusive, climate-friendly and green banking system is only possible with the effective management of E&S risk in their business transactions. This study assesses the present implementation status of sustainability within commercial banks in Nepal, by examining their adherence to the environment and social risk (ESRM) guidelines issued by Nepal Rastra Bank (NRB). Using a descriptive research design, the study utilizes ESRM reports published by NRB in 2078/79 and 2079/80. The study examines the present state of ESRM guideline implementation across three key aspects of policy formation, training and development activities for bank employees, and incorporation of environmental and social risks within the core strategies of commercial banks. The result found a satisfactory level of implementation of ESRM guidelines. The policy formulation and governance indicators are almost realized and other indicators have satisfactory and progressive levels of operation in the banks. Effective implementation of sustainable guidelines and initiatives will be accomplished innovative financial instruments that incentivize green investments and support climate-resilient practices can further expedite the transition to a sustainable banking landscape. Overall, this study offers valuable insights into the current state of ESRM in Nepal's commercial banks, shedding light on the progress that can pave the way for a more sustainable and green financial system in Nepal.

What Is the Relationship between Corporate Social Responsibility and Financial Performance in the UK Banking Sector?

This study rigorously investigates the intricate dynamics between Corporate Social Responsibility (CSR), quantified through Environmental, Social, and Governance (ESG) scores, and financial performance (FP), measured via the return on assets (ROA) and return on equity (ROE), within the UK banking sector. Our analysis is based on a comprehensive dataset from Bloomberg. This research encapsulates data from 32 banks publicly listed on the London Stock Exchange over a six-year span from 2017 to 2022. Employing panel data regression models while controlling leverage and bank size, we delve into the relationship between banks’ CSR engagements, as reflected in their ESG scores, and their financial outcomes. Our findings indicate a negative correlation between the ESG score and both the ROA and ROE, suggesting that elevated CSR commitments may inversely impact short-term financial returns. This finding not only challenges prevailing narratives within the sector but also fosters a crucial discourse on the balance between ethical banking practices and profitability. The implications of this research study are manifold, extending to policymakers, banking executives, and investors, suggesting a revaluation of CSR strategies in alignment with long-term value creation and sustainable banking. This study not only enriches academic discourse on CSR within the financial sector but also serves as a beacon for future inquiries into the evolving landscape of responsible banking, advocating for a nuanced understanding of CSR’s role in shaping the financial and ethical contours of the banking industry.

Sustainable Banking in India: An Empirical Study of ESG Scores and Financial Performance

The research study on the relationship between ESG scores and financial performance in the banking sector of India reveals significant insights into the dynamics of sustainable finance. The analysis, conducted using data from eight banking companies over a five-year period, indicates a weak negative correlation between ESG scores and the compound annual growth rate (CAGR) of stock prices. Conversely, moderate positive correlations are observed between ESG scores and the CAGR of both return on assets (ROA) and return on equity (ROE). Regression analysis reinforces these findings, highlighting a weak linear relationship between ESG scores and financial metrics. Theoretical implications suggest alignment with stakeholder theory, agency theory, and institutional theory, emphasizing the importance of considering stakeholder interests, aligning incentives, and navigating institutional pressures. Managerial implications underscore the need for strategic integration of ESG factors into decision-making processes, stakeholder engagement, and investment in ESG education and training programs. The study identifies limitations, including inadequate ESG data availability and sector-specific focus, and suggests future research directions exploring diverse sectors and financial indicators beyond banking. Overall, the research contributes to advancing our understanding of sustainable finance and its implications for long-term value creation

A comparative review of human milk banking and national tissue banking programs.

This paper explores the legislative and operational commonalities and differences in Medical Products of Human Origin (MPHO) programs, including blood, hematopoietic cells, tissues and reproductive cellsand human milk banking. The analysis includes ethical principles in donation and utilization, policies and legislation, public awareness and education, registries, guidelines in donor selection, safety and quality assurance, operational models and funding, infrastructure and human resources andbiovigilance and evaluation of outcomes. Unlike other MPHO, the need for donor human milk (DHM) may be greatly reduced, that is, by ensuring optimal support for maternal lactation and breastfeeding. This should not be lost in the drive for wider and improved service provision. Nevertheless, increased overall demand for DHM is expected as a result of forthcoming international recommendations and also its increased use as the first-choice supplement to a mother's own milk both within and beyond preterm, low-birthweight and sick infant populations. Insight into current human milk banking highlights differences and gaps in practices that can benefit from further exploration and harmonization. Strong similarities with the ethical and operational principles underpinning donation and processing of the diverse MPHO suggest that legislating human milk banks within similar MPHO frameworks may bring additional safety and facilitate improved product quality. Moreover, that MPHO-inspired models operating within attainable regulatory requirements may contribute to sustainable human milk banking activity and growth.

Green Finance Initiatives to Improve Green Banking Practices in India

Green Finance Initiatives to Improve Green Banking Practices in India

Green banking disclosure from the perspective of corporate governance, financial slack and human resource slack in Indonesia

Green banking is a long-term business strategy with the main target of achieving sustainable benefits and preserving the environment. Determining the ability of corporate governance to influence green banking disclosure in banking companies in Indonesia was the aim of the study. Annual reports and sustainability reports of banking companies listed on the Indonesia Stock Exchange are used as secondary data. 84 data were used after selection using the purposive sampling method. The technique used to analyze the research data is SmartPLS. The findings show that good corporate governance can improve green banking disclosure. Financial slack and human resource slack, as moderating variables, can moderate the influence of corporate governance on green banking disclosure. The results also indicate that green banking disclosure has the potential to encourage positive changes in sustainable banking practices and information transparency. In the end, good corporate governance can stimulate bank management to care more about environmental issues. Financial and human resource slack in banking strengthens the relationship between the two and increases a company’s role in maintaining environmental and social sustainability.

Content Analysis of Green Banking Reports as an Effort to Fulfill Sustainability

Research Aims: This research aims to explore green banking disclosure among banks listed on IDX-IC shares in Indonesia. Design/methodology/approach: The method used involves conducting content analysis using indicators from research by Bose et al. (2018) and Handajani (2019). The total number of indicators is 21 items, covering the reporting period of 2019-2022. Research Findings: The research results help explain the development of the quality of disclosure in bank sustainability reports (green banking) in Indonesia, as well as the effectiveness of mandatory sustainability reports in the banking sector. Previously, some people believed that banks' contribution to environmental damage was relatively low. However, research results show that banks are beginning to concentrate on sustainability programs. In 2019, the percentage of disclosure was 50.71%; in 2020, it was 56.19%; in 2021, it was 57.76%; and in 2022, it was 62.74%. Although still relatively low, there has been a notable improvement in the quality of sustainability report information from 2021 to 2022. Theoretical Contribution/Originality: This research contributes to the literature related to bank disclosures in their activities supporting the SDGs and discusses the extent to which banks prioritize environmentally friendly banking activities. Keywords: sustainable bank, green banking, content analysis

Sustainability on the horizon? An investigation into sustainable banking practices in an emerging economy

PurposeThis study aims to investigate sustainability practices in the banking industry, focusing on a developing economy. It uses the triple-bottom-line framework to answer the following research question: how do banks in Nigeria conceptualise sustainability, and what role does it play in their banking practices?Design/methodology/approachThis study adopts a social constructivist approach in its exploration of banking sustainability practices in an emerging economy, and the research design is a purpose-based (exploratory) approach. The qualitative data was collected from 33 bank personnel from various bank units and departments through semi-structured interviews to achieve the research objective.FindingsThe study reveals a lack of sustainability policies and programmes, as banks focus mainly on profitability. It uncovers unfair treatments of bank workers through casualisation, low wages and work overload. It indicates that most banks in developing countries ignore environmental considerations, as they still carry out paper-based transactions and use diesel-powered generators, which cause various negative environmental impacts. It also confirms that governments and banks in the country are not doing enough to propagate sustainable practices and banks have also not taken advantage of the sustainability concept to promote their brands; instead, they consider it as requiring additional operational costs.Practical implicationsThe findings demonstrate the need for banks to see sustainability from a marketing point of view and adopt sustainable practices to create additional value that will improve their brand image and enhance their competitiveness.Originality/valueThe importance of sustainability in the banking industry in emerging economies is considered a viable means of contributing to the overall development goals of the United Nations as the world tries to preserve the environment. It also highlights the consequences of inaction or unsustainable banking practices.

Financial Literacy and Digital Banking Services in Sikkim

Objective: The research was multifaceted - the goal was dual folded: first, to establish how well people perceive online banking and the services they provide. The second area covered in the study was the intention to participate in electronic banking services. Theoretical Framework: The valuable impact of digitalization of banks on the rationalization of the local financial system. Along with this, financial literacy was highlighted in both the domestic industry and the international market which caused sustainable development. Method: The data was collected by administering a structured free format survey to the customers of banks in a district of Sikkim (East region) Convenience sampling was the approach undertaken for selecting respondents. Results & Discussion: The results and discussion were shown to have increased digital banking in recent times as reflected in the country. This is the second major rationale as to why cyber thieves should not be scared of e-banking since it appears more secure than traditional banking. Also, it has been seen that digital banks provide more diverse outlets in terms of loans and a wide spectrum of banking services. An efficient IT infrastructure and working devices fit the bill to make the financial market function correctly. Implications: This data can be used to suggest that in the future, financial literacy programs can be of maximum help to financial institutions thus increasing the frequency of digital banking. Originality: The uniqueness of this research lies in its analysis of the level of awareness and a high tendency of digital banking in a few municipalities which are situated in East Sikkim. Also, it recommends strategies like educational programs that are gender-sensitive and that contribute to a more resilient and sustainable digital banking ecosystem.

The Temporal Structuring of Corporate Sustainability

Research on corporate sustainability has started to acknowledge the role of temporality in creating more sustainable organizations. Yet, these advances tend to treat firms as monolithic and we have little understanding of how different temporal patterns throughout an organization shape perceptions of and actions toward sustainability. Building on studies highlighting how the temporal structures of work shape employee engagement with different organizational processes and issues, we seek to answer: How does the temporality of work practices structure perceptions of corporate sustainability throughout the firm? Using data from an ethnography of a small European sustainable bank, we provide an account of the variety of ways in which employees in different departments perceive the bank and how they engage with sustainability. We then go on to show how the temporal structures of work practices within different departments help explain some divergence in perceptions of sustainability. Our study highlights the variegation of temporal structures in organizational processes of meaning-making and its role for a better understanding of the efforts to make corporations more sustainable.

Sustainable Finance and ESG Importance: A Systematic Literature Review and Research Agenda

Over the last decade, sustainable finance has appeared to be capturing a high level of interest as a crucial pillar of sustainable development. The process of taking environmental, social, and governance (ESG) considerations into account when making investment decisions in the financial sector is expected to play a key role in this framework, and although it has attracted the attention of many scholars and academics, a lack of understanding of the nature of the phenomenon remains. Therefore, on the basis of a systematic literature review of 80 studies, we examine, in detail, the subject areas and emphasize the main points in the existing literature. The findings reveal that there are four main thematic areas attracting research interest, as follows: (1) A shift in value creation; (2) green bonds; (3) ESG ratings and performance; and (4) sustainable finance, banking, and financial risks. Finally, this study outlines future research avenues in the field.

Digital Transformation's Moderating Role on Financing and Capital Quality Impacts for Sustainable Islamic Rural Banking in Indonesia

Digital Transformation's Moderating Role on Financing and Capital Quality Impacts for Sustainable Islamic Rural Banking in Indonesia

Trends in Sustainable Banking Practices: A Bibliometric Review of Green Financial Services and Risk Management Strategies

Sustainable banking practices and environmentally friendly financial services are becoming an increasing research focus in the modern financial era. This article performs a bibliometric review of trends and strategies in this domain. It was found that green finance concepts, such as green bonds and environmentally friendly banking practices, as well as the integration of financial technology (fintech), were in the main spotlight. However, the COVID-19 pandemic has also influenced green investment trends and environmental risk management strategies. In conclusion, this article highlights future challenges and opportunities, including the integration of fintech in green finance, green banking practices in various countries, and the contribution of the financial sector to achieving the Sustainable Development Goals (SDGs).