GREEN FINANCE AND ENVIRONMENTAL ACCOUNTING: EMPIRICAL INSIGHTS FROM SUSTAINABLE BANKING PRATICES

Abstract: This study investigates the relationship between green finance and environmental accounting, using empirical data from sustainable banking practices in Nigeria. In recent years, the pressure to align financial services with environmental sustainability has intensified, prompting banks to adopt green finance tools such as green bonds, ESG loans, and renewable energy funding. However, the extent to which these practices are supported by robust environmental accounting systems remains understudied, especially in emerging economies. This research adopts a quantitative approach, surveying 110 banking professionals across various institutions. Data were analyzed using descriptive statistics, Pearson correlation, and linear regression analysis. The results reveal a high level of awareness of green finance among respondents, with a mean score of 3.77 (Agree) and a standard deviation of 1.08. A strong and statistically significant correlation was found between green finance and environmental accounting (r = 0.712, p < 0.01), indicating a positive linear relationship. Furthermore, regression analysis shows that green finance significantly predicts environmental accounting practices (β = 0.712, t = 10.52, p = 0.000), accounting for 50.7% of the variance (R² = 0.507). These findings suggest that green financial practices are a strong driver of transparency, impact reporting, and sustainability performance in banks. The study suggests that regulatory authorities should mandate environmental accounting as a prerequisite for green finance participation and promote capacity-building initiatives within banks to embed sustainability practices into their operations. The integration of green finance and environmental accounting not only strengthens corporate accountability but also supports Nigeria’s commitment to the United Nations Sustainable Development Goals (SDGs).