Green banking and sustainability: A comprehensive review
DOI:
https://doi.org/10.67497/ijrip.1.2.47Keywords:
Green banking, sustainable finance, ESG, green brand image, green banking policy, competitive advantage, sustainable performance, developing economies, regulatory framework, UN SDGsAbstract
Green banking has gone from being a niche concept to becoming part of the sustainable finance landscape all over the world, requiring financial institutions to balance profit and environmental stewardship. This extensive review integrates evidence from over 70 published studies, including four focal papers on India, Bangladesh and Malaysia to offer a multi-dimensional analysis of green banking across theoretical, empirical, comparative and policy dimensions. The review adopts the lenses of Legitimacy Theory, Stakeholder Theory, Institutional Theory, the Resource-Based View (RBV), the Natural Resource-Based View (NRBV) and Microfoundations of Dynamic Capabilities to explore the organisational and regulatory forces that enable or hinder the adoption of green banking. The results of this review are consistent with the positive impact of green banking practices (GBP) on the banks’ sustainable performance (BSP), competitive advantage (CA), organisational performance (OP), and environmental performance. The mediating roles of Green Brand Image (GBI) and Green Banking Policy (GBP) and the moderating effect of Green CSR (GCSR) are documented and theorised. The review further outlines the landscape of practical green banking initiatives – including paperless banking, solar powered ATMs, green bonds and waste-to-energy financing – and looks at contributions to the United Nations Sustainable Development Goals (SDGs). Barriers identified and analysed include regulatory fragmentation, lack of financial incentives, greenwashing risks, institutional inertia and technological capacity gaps. The paper ends with an integrated policy framework and agenda for future research.
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