Green Financing as a Bridge Between Green Banking Strategies and Environmental Performance in Punjab, India

Abstract

Green banking (GB), which aligns financial practices with environmental sustainability, is becoming increasingly important in solving modern global concerns such as climate change and resource conservation. This research examines the notion of GB and its significant consequences for the environmental performance of the banking sector in Punjab (India). The unique economic and environmental characteristics of Punjab makes it an essential area for investigating the implementation of GB strategies. The research focuses on the intricate relationship between operations-related GB strategies and a bank's environmental performance, particularly emphasizing the mediation of banks' green financing. Data for this study was meticulously gathered from public and private sector bank employees, comprising 290 participants. Structural Equation Modeling (SEM) method was utilised for the analysis and the findings demonstrate a statistically significant and positive relationship among the variables indicated above. Furthermore, the research reveals that green finance partially mediates this relationship. These results have far-reaching implications for the banking sector's various stakeholders. This research can help regulatory authorities and policymakers in the conceptualization of laws and regulations that encourage green banking adoption. Banking institutions, in turn, may use this knowledge to improve their strategies and operations, improving environmental performance while preserving financial stability.