Green banking adoption practices: improving environmental, financial, and operational performance

Abstract

PurposeThe increased concerns for the environment have led organizations, businesses and nations to act environmentally friendly. This has also pressurized the banking sector to adopt green practices. However, there is a dearth of studies related to green banking (G-banking) adoption practices (GBAP) on banking performance. Hence, by considering the resource-based view theory, this study aims to examine the impact of GBAP on banking performance, i.e. financial, operational and environmental performance.Design/methodology/approachThe data was acquired from banking personnel in Pakistan using a five-point Likert scale questionnaire and a non-probability purposive selection technique. In total, 400 responses were gathered, on which data screening was performed to detect and delete outliers. On a useful sample of 360, partial least square-structural equation modeling was used to validate the hypotheses.FindingsThe findings revealed that GBAP positively affects the environmental, operational and financial performance of the banks. The findings further revealed that GBAP largely affects environmental performance followed by operational performance and financial performance, respectively.Practical implicationsThe study findings offer various insights to the policymakers and the banking sector to better implement G-banking practices in improving banking performance.Originality/valueTo the best of the authors’ knowledge, this is one of the first studies to look at the effect of GBAP on key performance outcomes, i.e. financial and operational performance. This study also verifies the use of resource-based perspective theory in the context of G-banking.