Why do microfinance institutions go green?
AbstractIn recent years, in addition to financial and social objectives, the microfinance industry has started to look at its environmental bottom line. The objective of this paper is to identify why microfinance institutions (MFIs) decide to go green. Data was collected through a quantitative survey of 160 MFIs and qualitative semi-structured interviews of 23 MFIs’ top managers. Basing our analysis on the model of ecological responsiveness developed by Bansal & Roth (2000), we discover that MFIs that are the most proactive in environmental management are primarily motivated by social responsibility, additionally by competitiveness, and to a lesser extent by legitimation (stakeholder pressure). MFIs for which legitimation is the dominant driver tend to adopt a defensive approach and set up more superficial negative strategies to appear green. In contrast, MFIs for which social responsibility is the dominant driver tend to be more proactive and innovative and develop adapted financial and non-financial services to promote environmentally-friendly practices.
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 12-015.
Length: 24 p.
Date of creation: Apr 2012
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Microfinance; Ecological responsiveness; Environmental motivation; Organizational decision making; Corporate Social Responsibility;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-17 (All new papers)
- NEP-ENV-2012-04-17 (Environmental Economics)
- NEP-MFD-2012-04-17 (Microfinance)
- NEP-PKE-2012-04-17 (Post Keynesian Economics)
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