Developing environmental performance in the Bangladesh banking sector: role of fintech, climate finance and environmental awareness

This study aims to investigate the relationship between climate banking and the environmental performance of banks in Bangladesh, focusing on climate finance, environmental awareness, and the role of FinTech. The study used the partial least squares structural equation modeling (PLS-SEM) technique to analyse data from 312 bank practitioners. The results revealed that climate banking practices (CBP) are positively associated with climate finance (CF), environmental awareness (EA), and FinTech adoption (FA). CF and FA are positively related to the bank’s environmental performance (BEP), while EA determines both direct and indirect associations with BEP. FA and CF play a mediating role in the relationship between CBP and BEP. This research contributes to the first empirical understanding of how digital transformation and climate-aligned financing mechanisms can promptly promote sustainability in the Global South banking sector context. This builds the groundwork for understanding how increased climate change resilience can contribute to the sustainability and global competitiveness of banks in emerging economies. This also aids policymakers and banks in developing convergence strategies with global frameworks for sustainable development.