Purpose The purpose of this study is to empirically examine the determinants and outcomes of Green Banking adoption and the moderating influence of top management commitment under the corporate environmental ethics ideology. External stakeholder pressures are analyzed as determinants of Green Banking adoption. Brand image and operational efficiency are examined as outcomes of this business ideology. Green Banking adoption is adapted as a second-order construct with four first-order reflective constructs to ensure in-depth conceptualization of the construct. Design/methodology/approach Green Banking adoption is studied at the bank branch level in a developing country, i.e. Pakistan. The data is collected from the branch managers of 212 bank branches from five major cities of Pakistan through mails. Self-administered survey was used for the data collection. The data was analyzed through the application of partial least square-structured equation modeling in SMART PLS 3.2.9. The measurement model and the structural model of the research framework were analyzed through the two-stage approach of the second-order analysis. Findings The results indicate a positive relationship between customer and competitor pressure and Green Banking adoption among bank branches in Pakistan depicting an influence of various environmental ethical pressures on bank’s adoption practices. Community pressure was shown to have no significant influence on Green Banking adoption at the branch level. The moderator of top management commitment caused a positive influence on the relationship between all the studied stakeholder pressures and Green Banking adoption. Branch managers reported branch image and operational efficiency to be enhanced due to Green Banking adoption. Originality/value This study attempts to fill in the significant gap in Green Banking adoption literature through an empirical analysis of Green Banking’s second-order construct. Currently, limited literature exists on the various aspects of Green Banking adoption, and an empirical study has not been conducted at the bank branch level. The study contributes significant practical, theoretical and methodological contributions to the area of Green Banking.

Green Banking adoption has gained momentum in the past few decades in both the developed and developing economies. The green movement in the banking sector has been triggered due to its potentially adverse role in global natural environmental degradation and natural resource depletion. A number of banking operations have the potential to harm the natural environment, both directly and indirectly. Due to this, many countries have started working on greening their banking sectors. Pakistan is among the top countries threatened by climate change, environmental degradation and resource depletion. The country is currently at the initial stages of Green Banking adoption. This case study follows the Green Banking adoption journey of Pakistan’s banking industry in light of the obstacles faced, milestones achieved and the learning outcomes for the other developing countries struggling from environmental degradation. This case study can serve as a learning tool for the regulatory authorities and other concerned stakeholders of developing economies in need of Green Banking adoption.

All around the world, Green Banking has gained a tremendous moment in the last few decades. The green movement in the banking sector was triggered due to the escalating global climate change being caused by environmental degradation. Mostly attributed to the manufacturing sector, it has now been realized that banks are one of the major causes of the global climate change both directly and indirectly. This has caused an increased focus and stakeholder pressure for Green Banking adoption at the global level. Based on the Institutional theory, this study proposes a framework for examining the relationship between organizational adoption determinants and the adoption of Green Banking. The proposed framework is based on Institutional theory and justified through the existing literature. The study proposes the hypothesis for examining the relationship between determinants and Green Banking adoption. External or institutional factors are proposed to play an essential role in influencing a bank’s adoption of Green Banking practices. The proposed framework can be adopted by a country’s regulatory authorities and the individual banks in order to identify the factors that can positively influence and facilitate the adoption of Green Banking.

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