The growing concerns about global climate change have thrust green banking and green finance into the forefront of discussions. The research suggests that green banking plays a pivotal role in advancing environmental sustainability. This study focuses on examining the profound impact of green banking practices on the environmental performance of banks, with a specific focus on both private and public sector banks operating in India through a survey involving 500 bank employees the study employed partial least squares structural equation modelling (PLS-SEM). The findings highlight various aspects of green banking, encompassing employee-related practices, operational procedures, customer engagement, and policy adherence, and significantly contribute to the promotion of green finance, resulting in substantial positive effects. Moreover, the study underscores the substantial and positive influence of banks' green financing on their environmental performance. Interestingly, the operational features of green banking practices emerged as having a notable impact on banks' environmental performance, whereas aspects related to employees, policies, and customers did not directly and significantly influence environmental performance. The results of the study carry significant policy implications, especially for India's banking sector, in the pursuit of environmental sustainability.
Keywords: Carbon emission; Climate change; Environmental sustainability; Green banking; Green finance.
© 2024. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.