Top Management Commitment as a Moderator in the Relationship Between Green Banking Adoption Practices and Performance: Evidence from India

Abstract

This article aims to investigate the relationship between green banking adoption practices and performance. A conceptual model has been developed to test the moderating effect of top management commitment in the relationship between green banking adoption practices and performance in a lower-middle-income country context, that is, India. Using a survey instrument, data were collected from 393 employees working in banks in southern India. First, the psychometric properties of the survey instrument were checked using LISREL software for structural equation modelling. Second, the hypothesised relationships were tested using hierarchical regression and double-checked with path analysis. The findings indicate that green banking adoption practices are precursors to environmental, operational and financial performance. The results also provide support for the moderating effect of top management commitment in the relationship between green banking adoption practices and (a) environmental performance, (b) operational performance and (c) financial performance. The green adoption practices encompass a range of initiatives to reduce environmental impact, promote sustainability and address climate change concerns. Top management commitment is at the forefront of driving these practices, which plays a pivotal role in shaping organisational strategies and fostering a culture of sustainability. To the best of our knowledge, the model developed is the first of its kind, particularly in the context of banks in India. Investigating the interaction effect of top management commitment in enhancing performance is a novel idea and significantly contributes to the literature on sustainability. The implications for theory and practice are discussed.