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Green banking practices, bank reputation, and environmental awareness: evidence from Islamic banks in a developing economy

Author

Listed:
  • Ikram Ullah Khan

    (University of Science and Technology Bannu)

  • Zahid Hameed

    (Prince Mohamed Bin Fahd University)

  • Safeer Ullah Khan

    (Gomal University)

  • Manzoor Ahmad Khan

    (Gomal University)

Abstract

Fulfilling the international considerations of environment, societal, and governance challenges, the financial industry, especially banks, has initiated “Go Green” practices to help sustain the environment and enhance “banking” across the globe. Amidst the green and climate-friendly drives, there is scarce literature highlighting the banks’ green practices, environmental awareness, and their effects on bank reputation, especially the reputation of Islamic banks. This study aims to investigate the green banking practices of Islamic banks in a developing Islamic country. Focusing on the greening ambitions of banks, this study argues that the reputation of Islamic banks can be better enhanced through adopting green banking initiatives that will beget better climatic outcomes in Muslim societies. Therefore, the study illumes green banking practices and their impact on the reputation of Islamic banks in Pakistan. Moreover, this study checks the moderation effect of employees’ environmental awareness on banks' reputation. The study used deductive rationale and quantified the employees' data to unravel their go-green perceptions and bank green activities. In this regard, the 390 response data, collected through a survey from the employees of Islamic banks, were analyzed through Smart-PLS, using structural equation modeling technique. The study finds that banks’ employees-related practices (ERPs), daily operations-related practices (DORPs), customers-related practices (CRPs), and banks’ policy-related practices (PRPs) have a significant positive influence on bank reputation. The authors also find that there is a significant moderating impact of environmental awareness between the relationships of ERPs, DORPs, CRPs, PRPs, and bank reputation. The study might increase understating and enlighten regulators and bank management to sustainably transform their operations to green banking practices, particularly adding to the environmental sustainability in Pakistan.

Suggested Citation

  • Ikram Ullah Khan & Zahid Hameed & Safeer Ullah Khan & Manzoor Ahmad Khan, 2024. "Green banking practices, bank reputation, and environmental awareness: evidence from Islamic banks in a developing economy," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(6), pages 16073-16093, June.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:6:d:10.1007_s10668-023-03288-9
    DOI: 10.1007/s10668-023-03288-9
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    References listed on IDEAS

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