Impact of Green Banking Practices on the Environmental Performance of Banks: The Mediating Role of Green Financing in Sri Lanka

Green Banking Practices and Environmental Performance

Key finding of the study

The study highlights that green finance partially mediates the relationship between green banking practices (GBPs) and environmental performance (EP) in Sri Lanka.

Authors

N.J. Dewasiri, Department of Accountancy and Finance, Sabaragamuwa University of Sri Lanka, Belihuloya, Sri Lanka

M.V.P. Hanshani, Department of Accountancy and Finance, Sabaragamuwa University of Sri Lanka, Belihuloya, Sri Lanka

M.S.H. Rathnasiri, Department of Marketing Management, Sabaragamuwa University of Sri Lanka, Belihuloya, Sri Lanka

S. Grima, Faculty of Economics Management and Accountancy, University of Malta, Msida, Malta

Summary

This chapter examines the effect of green banking practices (GBPs) on environmental performance (EP), specifically focussing on the Sri Lankan banking industry. The survey included 233 banking employees from Sri Lanka, and data for this study were collected via questionnaires. The formulated hypotheses were tested employing a regression analysis.GBPs such as employee, customer, operation, and policy-related practices significantly predicted the banks’ EP. Furthermore, the study highlights that green finance partially mediates the relationship between GBPs and banks’ EP in Sri Lanka. The study’s results indicate that banks should prioritise integrating GBPs in their organisations to enhance environmental and overall performance. Moreover, strategically utilising green financing techniques might be a substantial channel for banks to further strengthen their ecological dedication and influence. This is the first study to investigate the impact of GBPs on banks’ EP with the mediating effect of green finance in the Sri Lankan context.

Published in

Sustainability Development through Green Economics

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