The Journey of Pakistan’s Banking Industry Towards Green Banking Adoption

Abstract

Green Banking adoption has gained momentum in the past few decades in both the developed and developing economies. The green movement in the banking sector has been triggered due to its potentially adverse role in global natural environmental degradation and natural resource depletion. A number of banking operations have the potential to harm the natural environment, both directly and indirectly. Due to this, many countries have started working on greening their banking sectors. Pakistan is among the top countries threatened by climate change, environmental degradation and resource depletion. The country is currently at the initial stages of Green Banking adoption. This case study follows the Green Banking adoption journey of Pakistan’s banking industry in light of the obstacles faced, milestones achieved and the learning outcomes for the other developing countries struggling from environmental degradation. This case study can serve as a learning tool for the regulatory authorities and other concerned stakeholders of developing economies in need of Green Banking adoption.

Pathways towards Green Banking adoption: moderating role of top management commitment

“…Pakistan is a developing country that is facing severe climate change and natural resource shortages due to the growing levels of pollution in the country. The country is significantly lagging behind in Green Banking adoption as compared to its neighboring countries like China and Bangladesh (Bukhari et al, 2020a(Bukhari et al, , 2020b(Bukhari et al, , 2020c.…”

“…Pakistan's banking industry also experiences a high level of mimetic pressure due to the competitive environment and regulatory mechanism of the State Bank of Pakistan. The Green Banking guidelines have been issued for the banking industry and banks that adopt Green Banking can gain a competitive advantage (Bukhari et al, 2020a(Bukhari et al, , 2020b(Bukhari et al, , 2020c. Competitor pressure forces banks to adopt Green Banking to capture new market opportunities and achieve various benefits (Prajogo et al, 2012).…”

“…The banking industry has a substantially important role to play in the survival of a country's economy, especially in the current times. The potential adverse environmental impacts of the banking industry have caused stakeholders to increase pressure on banks to operate in a more environmentally friendly manner (Bukhari et al, 2020a(Bukhari et al, , 2020b(Bukhari et al, , 2020cSahoo and Prasad, 2007;Shakil et al, 2014). International organizations such as the International Finance Corporation (IFC) have partnered with regulatory authorities of different countries to implement green management principles in the banking industry.…”

Green banking initiatives: a qualitative study on Indian banking sector

“…Need for improved regulatory framework and collaborated efforts of all stakeholders was also found imperative in achieving the required goals (Miah et al, 2020). Previous studies clearly point out towards multi-stakeholder involvement in facilitating green building adoption (Bukhari et al, 2020).…”

The Role of Green Human Resource Management Practices towards Attaining Sustainable Development Goals through Corporate Sector

“…Addressing the knowledge gaps in this area, how corporate-sector can contribute to the attainment of SDGs is uncertain. On one side, the corporate or business sector is blamed to be major culprit toward environmental degradation that occurred due to its unsustainable activities (Bukhari et al, 2020;Dechant & Altman, 1994;Talukdar & Meisner, 2001;Fiksel, 1993), but on the other side, the role which the newage corporate-sector (transitioning into sustainable business models) could have played in attaining SDGs has not been studied in extant literature. Although, Chams and García-Blandónb (2019) came with a qualitative review where the role of sustainable HRM (SHRM) in facilitating the accomplishment of just four SDGs (i.e., 8, 10, 12 &17) was proposed, although the study was novel in its own kind, but the potential of HRM was not fully explored, even conceptually.…”