Achieving Competitiveness: Should Banks Concentrate on Green Human Resource Management and Green Managerial Innovation?

Background: The detrimental impacts of climate crises have triggered numerous studies to discover the role of green human resource management (GHRM) in strategic business nowadays. However, compared to the manufacturing industry, the banking sector appears to receive less attention from academics. Objective: This study highlights how GHRM can enhance banks’ competitive advantage and why bank leaders should prioritise green managerial innovation (GMI) to intensify their business activities. Methodology: The research objectives were addressed utilising Partial Least Squares Structural Equation Modelling (PLS-SEM). Empirical data were derived from 226 completed questionnaires administered to senior and middle-level management across Vietnamese banking institutions. Result: The analysis demonstrates that the robust implementation of GHRM practices significantly reinforces organisational competitiveness and concurrently cultivates GMI. Furthermore, the findings establish GMI as a pivotal antecedent to securing a sustained strategic advantage for the banking entities. Conclusion: The empirical evidence strongly supports the imperative and symbiotic roles of both GHRM and GMI in modern banking operations, particularly within the dynamic context of an emerging market. Unique Contribution: This investigation furnishes the first empirical validation pinpointing the mechanisms by which GHRM and GMI collectively foster bank business outcomes, specifically within a bank-dependent economy. The findings offer actionable guidelines for decision-makers in climate-vulnerable economies like Vietnam to strategically leverage GHRM for the effective dissemination of national green policy mandates. Key Recommendation: In light of Vietnam's pronounced vulnerability to climate-related hazards, we strongly recommend that bank decision-makers immediately operationalise the empirical findings of this study. Specifically, leadership must strategically integrate robust Green Human Resource Management (GHRM) practices directly into core business strategy management frameworks. This integration is critical not only for enhancing competitive positioning but also for ensuring the effective and widespread dissemination and implementation of national green policies across the financial sector.