Measuring the impact of green banking practices on banks’ environmental performance and sources of green financing: a study on Indian banks

Abstract

Abstract Green banking, an innovative strategy integrating financial parameters with environmental stewardship, can deal with climate issues. Green banks can intimidate deforestation, minimizing waste and conserving nature’s resources. Hence, based on the Socially Responsible Investment (SRI) theory, this study aims to determine how Green banking practices (GBP) impact the Bank’s Environmental Performance (BEP) and Sources of Green Finance (SGF) in Uttarakhand. The Uttarakhand region is witnessing an unprecedented surge in its tourism and transportation sector, and financial institutions heavily fund these sectors, necessitating the need to investigate GBP in this area. Moreover, this study also endeavors to ascertain the SGF’s mediating role between GBP and BEP. The study employed convenience sampling and included 309 banking employees in Uttarakhand, India. Empirical findings based on Structural Equation Modelling indicated that GBP substantially improves BEP and SGF and also SGF mediates the association between BEP and GBP. The study indicates that incorporating GBP improves environmental performance, increases profitability, and boosts employee performance.