Corporate Social Responsibility, Green Finance and Environmental Performance: Does Green Innovation Matter?

Abstract

This study aims to examine the impact of Corporate Social Responsibility (CSR) and Green Finance (GI) on the Environmental Performance (EP) of banking institutions in emerging markets like Bangladesh. The study also examines the role of green innovation (GI) as a mediator in the existent relationship between CSR, GF and EP. Data were obtained from 357 bankers of commercial banks in Bangladesh through the aid of structured questionnaires. A structural equation modeling approach was employed in the investigation of the obtained primary data, and results revealed that CSR had a significant positive impact on GI and EP, while GI strongly enhances EP. Besides, the findings revealed that GF had a significant positive influence on GI and EP. Furthermore, the research data indicated that GI fully mediates the link between CSR and EP, and GF and EP significantly. The study highlights the importance of CSR dimensions (social, economic and environmental), GF and GI in the attainment of EP, as well as the urgent need to incorporate sustainability into banking strategies to help achieve the country’s long-term economic development. As a result, major policy implications were further addressed.