Determinants of Green Banking Adoption and Bank’s Performance: An Emerging Challenge

Abstract

Green banking is getting importance and relevance due to rapid changes in the global environment and modern work practices. It is observed that adoption of green banking, and its penetration became essential because of increasing trends and rise in concern for the environment. Environmental degradation, greenhouse effect, global warming, and carbon footprint created many challenges for service sector also, especially the banking sector. A Structured questionnaire in English, based on Institutional theory was used to get response regarding selected variables in the local setting of Pakistan. 200 complete and valid questionnaires were obtained from participants who are working as full-time employees in managerial positions having sufficient knowledge and awareness about green banking in the selected banks. Data were analyzed by using SPSS through application of selected statistical tools. Results showed that adoption of GB is gaining the importance in the banking sector. Moreover, GB adoption is driven by customer demand, management support, and perceived risk that could be helpful for better performance of financial institutions. Findings indicate that the competitive pressure and regulatory requirement does not influence the GB adoption. This study could be beneficial for the bankers, regulators and other stakeholders.