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Adoption of green banking practices and environmental performance in Pakistan: a demonstration of structural equation modelling

Author

Listed:
  • Alam Rehman

    (National University of Modern Languages)

  • Irfan Ullah

    (Nanjing University of Information Science and Technology)

  • Fakhr-e-Alam Afridi

    (Islamia College Peshawar)

  • Zain Ullah

    (City University)

  • Muhammad Zeeshan

    (Liaoning Technical University)

  • Arif Hussain

    (Abdul Wali Khan University)

  • Haseeb Ur Rahman

    (University of Science and Technology)

Abstract

Banking industries are blamed to be among the major factors that affect global climate change both directly and indirectly. The green banking concept has emerged in the last decade to trigger the adverse impact the banks put on a healthy environment. However, research regarding the adoption of green banking practices in developing economies, especially in Pakistan, is scarce. While environment friendly businesses are promoted by the government including in the banking industry. Green banking practices not only adopted by the business operations but also to practice it at policy-making level. It also encourages green project financing to ascertain environmental efficiency. Based on SRI theory, this study investigates the relationship between green banking practices and their direct and indirect impact on environmental performance. Structural equation modelling approach has been adopted to test the relationships of variables of the study. The impact of the green practices has been recognized much greater and influential in promoting green environment regarding policy-making and investments in green projects. Results reveal that there is a significant influence of policy, daily operations, and investments on the adoption of green banking practices. Interested parties can adopt the study proposed framework to access and identify the factors which can promote justified level of green banking practices in the country. Moreover, this study may help in providing rich updated literature in green banking to speed up future research in the same area.

Suggested Citation

  • Alam Rehman & Irfan Ullah & Fakhr-e-Alam Afridi & Zain Ullah & Muhammad Zeeshan & Arif Hussain & Haseeb Ur Rahman, 2021. "Adoption of green banking practices and environmental performance in Pakistan: a demonstration of structural equation modelling," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(9), pages 13200-13220, September.
    • Handle: RePEc:spr:endesu:v:23:y:2021:i:9:d:10.1007_s10668-020-01206-x
    DOI: 10.1007/s10668-020-01206-x
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    Cited by:

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    2. Hamisu Sadi Ali & Malayaranjan Sahoo & Md. Mahmudul Alam & Idris Isma’il Tijjani & Abul Quasem Al-Amin & Adeel Ahmed, 2023. "Structural transformations and conventional energy-based power utilization on carbon emissions: empirical evidence from Pakistan," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(3), pages 2419-2442, March.
    3. Xin Zhang & Zhihui Wang & Xiaobing Zhong & Shouzhi Yang & Abu Bakkar Siddik, 2022. "Do Green Banking Activities Improve the Banks’ Environmental Performance? The Mediating Effect of Green Financing," Sustainability, MDPI, vol. 14(2), pages 1-18, January.
    4. Shah Ali Murtaza & Asif Mahmood & Saima Saleem & Naveed Ahmad & Muhammad Suhail Sharif & Edina Molnár, 2021. "Proposing Stewardship Theory as an Alternate to Explain the Relationship between CSR and Employees’ Pro-Environmental Behavior," Sustainability, MDPI, vol. 13(15), pages 1-15, July.
    5. Linghui Kong & Muhammad Safdar Sial & Naveed Ahmad & Mariana Sehleanu & Zhihui Li & Malik Zia-Ud-Din & Daniel Badulescu, 2021. "CSR as a Potential Motivator to Shape Employees’ View towards Nature for a Sustainable Workplace Environment," Sustainability, MDPI, vol. 13(3), pages 1-13, February.
    6. Pranith Kumar Roy & Krishnendu Shaw, 2022. "Developing a multi-criteria sustainable credit score system using fuzzy BWM and fuzzy TOPSIS," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 5368-5399, April.
    7. Abdul Aziz Khan Niazi & Tehmina Fiaz Qazi & Hira Tanweer Butt & Ifra Aziz Khan Niazi & Abdul Basit, 2023. "A Structural Analysis of Barriers Being Faced by Green Banking Initiatives in Pakistan," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 9(2), pages 182-199.
    8. Edi Suandi & Herri & Yulihasri & Syafrizal, 2023. "Evaluating the relationship between entrepreneurial marketing, competitive advantage, and Islamic banks performance," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(3), pages 599-614, September.
    9. Wajeeha Aslam & Syed Tehseen Jawaid, 2023. "Systematic Review of Green Banking Adoption: Following PRISMA Protocols," IIM Kozhikode Society & Management Review, , vol. 12(2), pages 213-233, July.

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