Measuring Green Banking Practices on Bank’s Environmental Performance: Empirical Evidence from Kathmandu valley

Abstract

The research paper aims to analyze the impact of green banking practices on bank’s environmental performance in Nepal. The casual relational research design has been adopted in the study. The simple and stepwise multiple regression analysis have been performed to accomplish the objective of the research. The research paper follows cross-sectional qualitative research with descriptive outcome. The Chronbach’s Alpha has been used to analyze the reliability of instruments and data. The 189 samples have been collected from the banks using convenience sampling method. The SPSS software has been used to tabulate and analyze the data. The research paper concluded the energy efficient equipment and green policy posed the significant impact on bank’s environmental performance; green loan and green project as not. Similarly, the environmental training contributed mild to bank’s environmental performance. The findings of the paper suggested the role of banks and government in encouraging environmentally sustainable technologies as highly important for increasing bank’s reputation and awareness among customers.

The Effect of Green Banking Practices on Banks’ Environmental Performance and Green Financing: An Empirical Study

“…The study further showed that GB practices (environmental training of employees, energy-efficient practices, green policy and overall green projects) positively affected banks' environmental performance in city of Coimbatore, India. Similarly, Risal and Joshi [28] studied the impact of GB practices on banks' environmental performance in Nepal using multiple regression analysis. The study concluded that environmental training, banks' green policy and energy-efficient equipment significantly influenced the environmental performance of banks, contrary to the customer-related practices' (green financing and green projects), the effects of which were statistically insignificant.…”

“…The initial measurement items of BERP, BORP, BCRP and BPRP were formulated based on the related studies of refs. [16,28,29]. Furthermore, three items were developed from past studies [1,5] to measure the sources of green financing.…”

“…Furthermore, three items were developed from past studies [1,5] to measure the sources of green financing. Similarly, four items were extracted to measure bank's environmental performances [18,28,29].…”

“…However, these studies are mainly focused on GB activities and its development in the context of Bangladesh [15,22,23]; green banking adoption [16,24,25]; GB performance and environmental sustainability [19,21,22,26]; and green finance [1,5,27]. Besides these, a couple of studies have been conducted to measure the impact of GB practices on banks' environmental performance in Pakistan [16], Nepal [28], India [18] and Sri Lanka [29]. In the context of Bangladesh, few studies have been conducted which examine the relationship between GB practices, green banking performance and banks' environmental performance [15,19,21,22].…”

“…This study contributes to the existing literature, especially on GB, green finance and banks' environmental performance, in the following ways: First, the current study explores the research gap by analyzing the various GB practices theoretically and empirically based on bankers' knowledge of Bangladesh's banking sector. Second, the study measures the effect of GB practices on banks' environmental performance based on the structural equation modeling (SEM), as previous studies have mainly used descriptive statistics and multiple regression analysis to validate the relationships between study variables [14,18,28,29]. Third, this is a pioneering study that analyzes the relationship between various GB practices and the banks' sources of green financing based on the primary data obtained from bank's employees.…”