IDEAS home Printed from https://ideas.repec.org/a/bhx/ojtjoe/v5y2025i4p1-12id3107.html
   My bibliography  Save this article

The impact of Green Financing, Fintech Adoption, Green Innovation and Corporate Social Responsibility on Bank Environmental Performance in Malaysia

Author

Listed:
  • Kumaran Vijayan

  • Dr. Rima Melini Md Tamin

Abstract

Purpose: This study investigates the impact of Green Financing (GF), Fintech Adoption (FA), Green Innovation (GI), and Corporate Social Responsibility (CSR) on Environmental Performance (EP) within the Malaysian banking sector. Methodology: The study employs a quantitative research approach using secondary data extracted from the sustainability reports, annual financial disclosures, and ESG databases of commercial banks in Malaysia. A purposive sampling method was used to select 20 banks that actively engage in green initiatives. The data was analyzed using SPSS software, applying descriptive statistics, regression analysis, correlation analysis, and chi-square tests. Findings: Preliminary results suggest that all four independent variables—Green Financing, Fintech Adoption, Green Innovation, and Corporate Social Responsibility —have a significant and positive influence on Environmental Performance. Among these, Green Innovation shows the strongest correlation, followed by Fintech Adoption. The findings also highlight gaps in standardized environmental performance metrics, particularly in reporting and transparency across institutions. Unique contribution to theory, practice and policy: Theoretically, the study contributes to Legitimacy Theory by demonstrating how financial institutions align with societal values through sustainability practices. In policy terms, the results can be used to justify further development and introduction of frameworks, such as the Climate Change and Principle-Based Taxonomy (CCPT) by Bank Negara Malaysia. In practical terms, the research provides banks in which to set their action plans on green policies and stakeholder confidence. It also focuses on the necessity of uniformity of measurement systems and inter-sector cooperation, when it comes to reinforcing environmental management in the financial industry in Malaysia.

Suggested Citation

  • Kumaran Vijayan & Dr. Rima Melini Md Tamin, 2025. "The impact of Green Financing, Fintech Adoption, Green Innovation and Corporate Social Responsibility on Bank Environmental Performance in Malaysia," Journal of Environment, CARI Journals Limited, vol. 5(4), pages 1-12.
    • Handle: RePEc:bhx:ojtjoe:v:5:y:2025:i:4:p:1-12:id:3107
    as

    Download full text from publisher

    File URL: https://carijournals.org/journals/index.php/JE/article/view/3107
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tao Kong & RenJi Sun & Guanglin Sun & Youtao Song, 2022. "Effects of Digital Finance on Green Innovation considering Information Asymmetry: An Empirical Study Based on Chinese Listed Firms," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(15), pages 4399-4411, December.
    2. Safi, Adnan & Kchouri, Bilal & Elgammal, Walid & Nicolas, Melhim Khoury & Umar, Muhammad, 2024. "Bridging the green gap: Do green finance and digital transformation influence sustainable development?," Energy Economics, Elsevier, vol. 134(C).
    3. Richard M. Crossley & Mohamed H. Elmagrhi & Collins G. Ntim, 2021. "Sustainability and legitimacy theory: The case of sustainable social and environmental practices of small and medium‐sized enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3740-3762, December.
    4. Mochamad Roland Perdana & Achmad Sudiro & Kusuma Ratnawati & Rofiaty Rofiaty, 2023. "Does Sustainable Finance Work on Banking Sector in ASEAN?: The Effect of Sustainable Finance and Capital on Firm Value with Institutional Ownership as a Moderating Variable," JRFM, MDPI, vol. 16(10), pages 1-19, October.
    5. Grijalvo, Mercedes & García-Wang, Carmen, 2023. "Sustainable business model for climate finance. Key drivers for the commercial banking sector," Journal of Business Research, Elsevier, vol. 155(PB).
    6. Li, Shibin & Wang, Qian, 2023. "Green finance policy and digital transformation of heavily polluting firms: Evidence from China," Finance Research Letters, Elsevier, vol. 55(PA).
    7. Hung Manh Pham & Nham Linh Vuong & Dung Viet Tran & Minh Thi Hai Ngo & Trung Tien Le, 2025. "Does environmental, social, and governance disclosure affect financial performance? An empirical study of Southeast and East Asia commercial banks," Asia-Pacific Journal of Regional Science, Springer, vol. 9(1), pages 1-26, March.
    8. Haibo Ruan & Li Qiu & Jun Chen & Shuo Liu & Zhiyuan Ma, 2022. "Government Trust, Environmental Pollution Perception, and Environmental Governance Satisfaction," IJERPH, MDPI, vol. 19(16), pages 1-18, August.
    9. Juniati Gunawan & Paulina Permatasari & Umesh Sharma, 2022. "Exploring sustainability and green banking disclosures: a study of banking sector," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(9), pages 11153-11194, September.
    10. Wang, Quan-Jing & Tang, Kai & Hu, Hai-Qing, 2022. "The impact of digital finance on green innovation: Evidence from provinces in China," Innovation and Green Development, Elsevier, vol. 1(1).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Bo & Hao, Yicai & Zhou, Yongqing, 2024. "Private economic support policies, enterprise financialization, and productivity," Finance Research Letters, Elsevier, vol. 69(PA).
    2. Bansal, Sanchita & Kumar, Satish & Ali, Searat & Singh, Shifali & Nangia, Priya & Bamel, Umesh, 2025. "Harnessing digital finance for sustainability: An integrative review and research agenda," Research in International Business and Finance, Elsevier, vol. 74(C).
    3. Chen, Yaqin, 2024. "Navigating resource scarcity and digital finance solutions for a sustainable future in ASEAN," Resources Policy, Elsevier, vol. 98(C).
    4. Sohail Ahmad Javeed & Xiang Cai & Rashid Latief, 2025. "Driving sustainable growth by unlocking the power of digital finance functions: the moderation of environmental regulations," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(4), pages 8525-8555, April.
    5. Zhang, Xu & Wang, Pengmian & Xu, Qiuxiang, 2024. "Corporate environmental governance under the coordination of fiscal and financial policies: The case of green credit subsidy policy," Finance Research Letters, Elsevier, vol. 64(C).
    6. Lei, Hao & Gao, Renyuan & Ning, Chutong & Sun, Guanglin, 2025. "Green finance and corporate green innovation," Finance Research Letters, Elsevier, vol. 72(C).
    7. Maria V. Sigova & Igor K. Klyuchnikov & Oleg I. Klyuchnikov, 2024. "Sustainability and Security of Green Finance from the Multi-agent Games Perspective," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 78-95, February.
    8. Satar Bakhsh & Md Shabbir Alam & Wei Zhang, 2024. "Green finance and Sustainable Development Goals: is there a role for geopolitical uncertainty?," Economic Change and Restructuring, Springer, vol. 57(4), pages 1-30, August.
    9. Wang, Wenwen, 2025. "Digital finance and firm green innovation: The role of media and executives," Finance Research Letters, Elsevier, vol. 74(C).
    10. Kun Wang & Bing Chen & Yuhong Li, 2024. "Technological, process or managerial innovation? How does digital transformation affect green innovation in industrial enterprises?," Economic Change and Restructuring, Springer, vol. 57(1), pages 1-32, February.
    11. Serhat Yüksel & Hasan Dinçer & Duygu Yavuz, 2023. "Determination of Priority Factors for the Development of Green Banking Practices in Turkey with the Fuzzy DEMATEL Method," Journal of Sustainable Development Issues (JOSDI), SDIjournals, vol. 1(1), pages 23-41, December.
    12. Fu, Shuke & Ge, Yingchen & Hao, Yu & Peng, Jiachao & Tian, Jiali, 2024. "Energy supply chain efficiency in the digital era: Evidence from China's listed companies," Energy Economics, Elsevier, vol. 134(C).
    13. Zhang, Yingying & Jin, Xin & Li, Hongtao, 2025. "The impact of digital financial inclusion on the high-quality development of small- and medium-sized enterprises—Evidence from China," International Review of Financial Analysis, Elsevier, vol. 102(C).
    14. Manos, Ronny & Finger, Maya & Boukai, Haim, 2024. "Self-regulation for responsible banking and ESG disclosure scores: Is there a link?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 97(C).
    15. Neha Chhabra Roy, 2024. "Sustainable lending strategies: a framework for enhancing climate resilience in industrial loan portfolios," Asia Europe Journal, Springer, vol. 22(4), pages 423-462, December.
    16. Wise, Andre & Parker, Hamieda, 2025. "Innovation in global forestry: Evolution towards a diversified industry," Journal of Business Research, Elsevier, vol. 189(C).
    17. Mingyue Xie & Suning Zhao & Kun Lv, 2024. "The Impact of Green Finance and Financial Technology on Regional Green Energy Technological Innovation Based on the Dual Machine Learning and Spatial Econometric Models," Energies, MDPI, vol. 17(11), pages 1-27, May.
    18. repec:zib:zbmbmj:v:3:y:2023:i:2:p:73-83 is not listed on IDEAS
    19. Zhang, Huaqing & Cai, Cen & Zhang, Xiangjian & Tu, Yongqian & Zhu, Qianyu, 2024. "Relationship between business environment and regional innovation level: Examining the moderating role of digital finance," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    20. Wang, Weilong & Wang, Jianlong & Wu, Haitao, 2024. "The impact of energy-consuming rights trading on green total factor productivity in the context of digital economy: Evidence from listed firms in China," Energy Economics, Elsevier, vol. 131(C).
    21. Xiaomeng Zhao & Kangyin Dong & Jun Zhao & Qingzhe Jiang, 2024. "RETRACTED ARTICLE: Paths to sustainable development in China: why green finance and green technology matter?," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-26, April.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bhx:ojtjoe:v:5:y:2025:i:4:p:1-12:id:3107. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chief Editor (email available below). General contact details of provider: https://www.carijournals.org/journals/index.php/JE/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.