Do green banking practices drive competitiveness and performance: an empirical study of Indian banks

Abstract Almost all sectors, including banking, face environmental issues that lead to market and reputational risks. Banks are uniquely positioned in mitigating this environmental damage. Hence, banks have prioritized green financing and the adoption of green banking practices. Banks are actively promoting investments in environmentally friendly products and services, which helps in promoting competitiveness and improved performance. Green Banking provides banks with several initiatives that can reform their organization and help their journey toward green growth. Therefore, this research’s main aim is to examine whether Green Banking Practices (GBP) impacts Competitive Advantage (CA) and Organizational performance (OP). Another objective of this research is to evaluate whether CA mediates the association between GBP and OP. In this regard, a survey was conducted to collect data from 385 employees of 4 Indian commercial banks (2 public and 2 private) operating in New Delhi. Data was analyzed using SmartPLS4 and SPSS. The study’s empirical results find a significant and linear association of GBP with CA (β value = 0.793, p = 0.000) and OP (β value = 0.440, p = 0.000). Moreover, the study also shows that CA is partially mediating (indirect effect = 0.0.415) the association between GBP and OP. This paper will offer unique results for Indian commercial banks and advance the body of knowledge on the subject.