Examining the factors that influence green banking practices among Saudi Arabian Islamic banks

In the 21st century, environmental sustainability has evolved into a crucial concern for human health, shifting societal attention to environmentally friendly behaviours. The problems of environmental degradation, pollution, and climate change have further sparked the commitment to enhance banking operations through green banking practices. This study investigates the impact of competitor pressure, customer pressure, environmental concern, and top management commitment to green banking practices in Saudi Arabian Islamic banks. The study utilised the data obtained through a survey with 307 bank professionals and experts as participants. The structural equation model technique is used to examine how the variables affect green banking practices. The findings show that factors such as management commitment, customer pressure, competitor pressure, and environmental concern have a significant impact on green banking practices. This suggests that continued commitment and efforts on various environmentally friendly activities will further improve the effectiveness and quality of banking services, giving Islamic banking institutions in Saudi Arabia a competitive advantage. Therefore, the Saudi Central Bank should continually emphasise environmentally responsive banking practices in its regulations, as doing so would strengthen the industry and encourage sustainable development.