Factors Influencing Green Banking Practices in Nepalese Commercial Banks

Abstract

Purpose: Grounded on the Theory of Planned Behavior, this study assesses green banking practices in Nepalese commercial banks and examines the influence of financial benefits, regulatory policies, brand image, stakeholders’ demands, and environmental interest, identifying the most influential factors.

Design/methodology/Approach: The study adopts a positivist philosophy with an explanatory design, surveying a sample of 228 respondents, including top, middle, and operational-level employees involved in decision-making or implementation of banking practices in 20 Nepalese commercial banks. Convenience sampling was employed to select respondents, and data were analyzed using SPSS 23. 

Findings: The findings indicated that environmental interest and financial benefits are the strongest predictors of green banking practices, followed by stakeholder demands. In contrast, regulatory policies and brand image were found to be insignificant, highlighting the dominant role of intrinsic motivation and economic incentives in driving sustainable banking practices.

Implications: The study suggests that banks can accelerate green banking practices by prioritizing internal environmental values and aligning financial benefits with stakeholder expectations, highlighting a shift from compliance-driven to motivation-driven sustainability strategies.

Originality/value: This study provides novel insights by integrating financial, environmental, and stakeholder perspectives within the TPB framework and shifting the focus from regulatory compliance to intrinsic motivation and strategic incentives for sustainable banking adoption.

JEL Classification: G21, Q56, M14