Green banking initiatives and the green financing mediating role of environment performances

Abstract

This study investigates the impact of green banking initiatives on environmental performance, emphasizing the mediating role of green financing within the banking sector of Nepal. As environmental sustainability becomes a critical concern globally, the banking industry is increasingly adopting green banking practices to promote ecofriendly financial services and support sustainable development. The research aims to examine how green banking initiatives influence environmental performance and to assess the extent to which green financing mediates this relationship. Employing a quantitative research design grounded in a positivist philosophy, primary data were collected through structured questionnaires administered to bank employees and stakeholders involved in green banking practices. The study utilized descriptive and inferential statistical methods, including Structural Equation Modeling (SEM), to analyze the data. Measurement model assessments ensured reliability and validity, while the structural model tested the hypothesized relationships among variables. The findings reveal a significant positive effect of green banking initiatives on environmental performance. Moreover, green financing was found to play a crucial mediating role, enhancing the influence of green banking on environmental outcomes. These results underscore the importance of integrating green financing mechanisms within banking operations to achieve better environmental sustainability. The study concludes that banks and policymakers should prioritize green banking and financing strategies to foster sustainable development and environmental stewardship. Recommendations are provided to strengthen green banking frameworks and promote wider adoption of environmentally responsible financial practices in Nepal.