Let’s go green: achieving consumer-related performance outcomes in banks

• Date: 28 July 2023
• Pages: 456-476
• DOI: https://doi.org/10.1108/IJOES-01-2023-0019
• Published date: 28 July 2023
• Subject Matter: Economics,Social economics
• Author: Wajeeha Aslam,Syed Tehseen Jawaid

Let’s go green: achieving

consumer-related performance

outcomes in banks

Wajeeha Aslam

Karachi University Business School, University of Karachi, Karachi, Pakistan, and

Syed Tehseen Jawaid

Applied Economics Research Centre, University of Karachi, Karachi, Pakistan

Abstract

Purpose –Due to the increased pollution and global warming, the banking sector is also implementing

green practicesin their operations to improve business ethics. However,there are few studies that have looked

at how green practices affectperformance outcomes. Considering this, the studyaims to examine the impact

of green banking adoptionpractices (GRBP) on consumer-related performance outcomes(i.e. consumer green

satisfaction, consumer green perceived quality, consumer green trust, environmental friendliness and

continuing relations with bank). The study used resource-based view theory and triple bottom line in

connectingGBRP and consumer-related performanceoutcomes.

Design/methodology/approach –The data was gatheredvia a Likert scale questionnaire from banking

personnel and consumers using a non-probability purposive sampling technique. The data of GRBP was

collected from the banking employees, whereas the data for consumer-related performance outcomes were

gathered from the banking consumers, and “Partial least square-structural equation modeling”(PLS-SEM)

was used to examineresearch hypotheses.

Findings –The results of PLS-SEM reveal that GRBP positively affects consumer green trust, green

perceived quality and green satisfaction. However, GRBP does not have any impact on environmental

friendliness. The results further reveal that GRBP largely affects consumer green trust followed by green

perceived quality and green satisfaction, respectively. Moreover, consumer green perceived quality, green

trust and environmentalfriendliness positively affect the continuingrelationship with the bank.

Originality/value –To the best of the authors’knowledge, this is the f‌irst study in the contextof green

banking, i.e. two-dimensional,as it examines the impact of GRBP on consumer-related performanceoutcomes

and conf‌irms that GRBP enhances consumer-related performance outcomes. The f‌indings of the study

provide numerousinsights to bank managers, environmentalistsand policymakers.

Keywords Social banking, Ethical banking, Green satisfaction, Green trust, Green banking,

Sustainable banking

Paper type Research paper

1. Introduction

The idea of sustainable development(SD) is now a part of business legitimacy and corporate

ethics, and it is debated that companies should consider their business ethics to increase

sustainability (Rendtorff, 2020). Around the world, industrial, agricultural and service

sectors are blamed for the degradation of the nature (Rendtorff, 2020), and companies must

work on a basis that is not only economically sound but also socially and environmentally

responsible (Elkingtonand Rowlands, 1999;Rendtorff, 2019b). Also, to meet United Nations

Sustainable Development Goals(SDGs), i.e. environmental degradation and climate change

(Sustainable development goals, 2022). Due to this reason, an increasing number of

businesses have adoptedenvironmental-friendly practices to lessen theirnegative impact on

IJOES

40,3

456

Received31 January 2023

Revised9 April 2023

17June 2023

Accepted24 June 2023

InternationalJournal of Ethics and

Systems

Vol.40 No. 3, 2024

pp. 456-476

© Emerald Publishing Limited

2514-9369

DOI 10.1108/IJOES-01-2023-0019

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/2514-9369.htm

the environment as fears about the bio-naturalenvironment rise, such as f‌loods, heat waves

and global warming (Aykol and Leonidou, 2015;Aslam et al., 2021;Aslam and Jawaid,

2022). Academic research on environmental-friendly practices has also expanded, but

interestingly, the previous studies have focused on manufacturing businesses, while the

service sector has received less attention (Ostrom et al., 2010;Aykol and Leonidou, 2015;

Aslam and Jawaid, 2022;Aslam and Jawaid, 2023), even though most of the global GDP is

generated by the service sector (Aslam and Jawaid, 2022). Hence, there is reason to believe

that designing service processes more sustainably could have a signif‌icant impact on

preserving the environment.

In response to the critical need for environmental sustainability, several countries are

drafting laws that are friendly to the environment (Nisha, 2020). Due to this, the concept of

“green banking”emerges also knownas “sustainable banking,”“socialbanking”or “ethical

banking”(Park and Kim, 2020) refers to “the delivery of f‌inancial products and services,

which are developed to meet the needs of people and safeguard the environment while

generating prof‌it”(Yip and Bocken,2018, p. 150). SD relies heavily on the f‌inancial sector as

it allocates funds to initiatives that help build a more equitable and environmentally

responsible society (da Silva Inacioand Delai, 2021;Bouteraa et al., 2022). Banking is one of

the f‌inance sector’s that can make a substantial contribution to SD (Solekah, 2019;Aizawa

and Yang, 2010;Gallagher and Yuan, 2017). Banks, through their f‌inancing activities, play

an important part in a country’s economic structure, inf‌luencing all types of commercial

activities (Nisha et al., 2020;Yadavand Pathak, 2013;Rehman et al., 2021). The literature on

green banking emphasized the importance of green banking adoption practices (GRBP) in

improving sustainability by reducing carbon dioxide (CO

2

) emissions in the environment

(Ikram et al.,2019;Rehman et al.,2021;Aslam and Jawaid, 2022;Bouteraa et al.,2021).

However, the studies on green banking are still at infancy (Sarma and Roy, 2021;Rehman

et al., 2021;Aslam and Jawaid, 2023;Bouteraaet al., 2022). The study of by Sarma and Roy

(2021) also underlined the lack of two-dimensional studies, and the literature revealed that

most studies on the green banking concentrated on the adoption’sindicators (Bukhari et al.,

2019a). On the other hand, very few research has considered the subsequent performance

outcomes. For example, Aslam and Jawaid (2022) examined the impact of GRBP on

organizational-related performance outcomes and highlighted that GRBP signif‌icantly

affects f‌inancial, operational and environmental performance. Additionally, Chen et al.

(2022) and Bukhari et al. (2022) considered environmental and operational performances,

respectively. Moreover, the recent studiesrelated to GRBP suggested considering GRBP on

consumer-related performance outcomes (Aslam and Jawaid, 2022;Aslam and Jawaid,

2023). Therefore, the study aims to cover the gap by examining the impact of GRBP on

consumer-related performance outcomes. The earlier literature highlighted various

customer-related performance indicators such as customer satisfaction (Bodhanwala and

Bodhanwala, 2021;Aslam and Jawaid, 2022), trust (Coelho et al.,2022) and retention rate

(Guerola-Navarro et al.,2021). The recent literature related to green banking also

emphasized to consider perceived quality and environmental friendliness (Aslam and

Jawaid, 2023) to assess as an outcomeof GRBP. Therefore, the study considered satisfaction,

trust, perceived quality, environmental friendliness and continuing relation with bank as

performance indicators. The study considered resource-based view theory (RBVT) in

conceptualizingthe relationship of GRBP and consumer-related performance outcomes.

The study contributed to the literature of greenbanking and offers numerous theoretical

and practical implications. This study is one of the earliest studies that considered the

perspective of employee’s GRBPon consumer-related performance outcomes. Moreover, the

Performance

outcomes in

banks

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