Green Banking : One Effort To Achieve The Principle Of Good Corporate Governance (GCG)

Abstract

Environmental damage that occurs in most of the Earth causing environmental movement nowadays in various fields with the term green, eco. One of them is in banking. Implementation of green banking holds the principle of sustainable development that development should have a balance on three viewpoints (Triple Bottom Line), they are Profit (Economy), People (Social) and Planet (Safe Environment). Business sustainability in the future must be achieved, the value of the company increase and grow rapidly also it must minimize the risk of environmental damage effectively and efficiently. (under the rules of Bank Indonesia refer to law no.32/2009 about the protection and management of the environment).(www.bi.go.id) Principles and purposes of green banking has similarities with the purposes and principles of Good Corporate Governance (GCG) that had already done (under the rules of Bank Indonesia no. 8/4/PBI/2006 on 30 th Januari 2006) which emphasizes the active cooperation between companies and stakeholders in creating wealth through good corporate governance in order to achieve a sustainable business. Through this similarity, the banking company can make a Positioning of their products in society becomes more precise through the principles of eco or green to support the success of Good Corporate Governance (GCG) by doing recycle program, less paper office program, energy savings, green investment, and green financing. The purpose of this paper is to emphasize the importance of green banking as an effort to achieve the principle of Good Corporate Governance (GCG). This paper is the type of qualitative. The data will collected through descriptive analysis method, literature study and theoretical analysis. The result of this paper is intended for Indonesian society, especially in the banking sector in order to create a sustainable business in the green banking industry towards ASEAN Economic Community (AEC) 2015.

Underpinning the benefits of green banking: A comparative study between Islamic and conventional banks in Bangladesh

“…Jizi et al () examine the disclosure of U.S. banks and found a positive association between board characteristics (independent directors and board size) and bank's environmental performance. However, implementation of green banking holds the principle of sustainable development (Dialysa, ), which may derive through two core reinforcements ‐ corporate governance compliance and firm‐specific needs. Researchers present evidence of corporate governance effects on firms' environmental issues and innovation (Amore, Bennedsen, & Nielsen, ; Bunget et al, ; Clark, ; Dialysa, ; Iraldo, Testa, & Frey, ; Radu, ).…”

“…In addition, past studies have ignored the governance structure of (Dialysa, 2015), which may derive through two core reinforcements -corporate governance compliance and firm-specific needs. Researchers present evidence of corporate governance effects on firms' environmental issues and innovation (Amore, Bennedsen, & Nielsen, 2015;Bunget et al, 2009;Clark, 2015;Dialysa, 2015;Iraldo, Testa, & Frey, 2009;Radu, 2012).…”

Consumer guilt and green banking services

“…Deadly bush fires, withering coral reefs, rising sea levels, and ever more cataclysmic storms are amongst the negative impacts of the decision by banks to support projects unfavourable to the environment (Ewing, 2020). Further, the environmental problems caused by some of these problems have been shown to lead to increases in stress, disgust, anxiety, and worry in people, which reduces public well‐being (Atik, Fırat, Ozgun, & Uzunoğlu, 2020; Doherty & Clayton, 2011).…”

“…Following the negative impacts of environmental degradation, banking customers have demonstrated interest in green banking, a type of banking that respects environmental issues in their operation. This interest has appeared in developed countries, such as Greece (Lymperopoulos, Chaniotakis, & Soureli, 2012) and France (Park & Kim, 2020), as well as in developing countries such as India (Bryson, Atwal, Chaudhuri, & Dave, 2016) and Indonesia (Dialysa, 2015). Missing from previous studies on green banking (Bryson et al., 2016; Lymperopoulos et al., 2012) is the role of emotion with moral perspective in driving behavioural intention (Antonetti & Baines, 2015).…”

Benefits That Islamic and Conventional Banks Can Attain by Implementing Green Banking

“…Only the path from green compliance to benefits has a moderate effect (f square=0.17, which is greater than 0.15), whereas the other two paths indicate a weak effect (less than 0.02) (Chin, 1998;Cohen,1988;Hair et al, 2014). In the literature, we found that some researchers (Clark, 2015;Dialysa, 2015;Radu, 2012;Iraldo et al, 2009;Amore et al, 2015;Bunget et al, n.d.) indicated a relationship between good governance and better environmental performance. In line with this, independent directors positive association with the board provides support for hypothesis H1b, which is also backed by many other studies (Mittal, 2011, De Andres & Vallelado, 2008, Shakir, 2008.…”