Impact of Green Banking Practices on Sustainable Bank Performance: A Study on Private Commercial Banks in Bangladesh

Abstract

The main objective of this research is to ascertain the impact of green banking practices on sustainable bank performance of private commercial banks in Bangladesh.  This explanatory research was conducted in Bangladesh using a survey-based design. Data were collected from 300 employees of private commercial banks through online platforms. A structured questionnaire measured green banking practices and sustainable bank performance. Data were analyzed using Structural Equation Modelling (SEM) with reliability and validity tests.  The results show that all five green banking strategies positively and significantly impact the sustainable bank performance. Green Investment shows the most important component among these practices, followed by Green Lending, Green Innovation, Green Processes and Procedures, and Green or Sustainable Products or Services. This study advances understanding of green banking’s role in sustainability, offering empirical evidence for researchers, while guiding banks and policymakers to prioritize green investments, lending, innovation, processes, and products to enhance environmental performance and efficiency.