A model from green finance for enhancing green innovation and environmental performance of the banking industry

Abstract

“Green environment” issues served as a crucial driving force for both industrial practitioners and researchers. Academically, there is a gradual shift in scholars' focus from broad discussions to specific constructs such as Green HRM Practices Mohammad et al. (2021), Green Bonds (Tolliver et al., 2020) and Green Innovation (El-Kassar & Singh, 2019). This study aims to examine the impact of exogenous factors on the environmental performance of banking organizations in Vietnam, including green finance (GF), fintech adoption (FA), and corporate social responsibility (CSR). Additionally, this research considers the role of Green Innovation (GI) as a mediating factor in the existing relationship between CSR, green finance and environmental performance. Based on the basic theories of CSR and the previous empirical studies, our research has constructed a structural model. This research was conducted by the quantitative survey method through (PLS-SEM) analysis via SmartPLS 4.0 software. The analysis unit is individuals, with a sample size of 418 employees and relevant job positions within banking organizations. Data were collected over a period of two months in January and February 2024. Our study proposes eight hypotheses to understand and clarify the impacts, emphasizing the importance of CSR (social, economic, and environmental), FA, GF, and GI in reaching EP. The first hypothesis states that GF significantly and positively impacts GI of banking organizations. The next hypothesis clarifies that FA positively impacts GI. Subsequently, the role and influence of CSR on GI are examined through the third hypothesis in the model. The fourth hypothesis emphasizes the importance of GF on the Environmental Performance of banking organizations. The fifth hypothesis addresses the strong promotion of CSR to EP. The significant impact of GI on EP of organizations is tested through the sixth hypothesis. Finally, the moderating mediating role of GI in the relationship between CSR and GF on the Environmental Performance of banking organizations is explored through the last two hypotheses. The results obtained address important policy implications. The findings of this research will contribute to promoting green finance development in the banking industry and enhancing the awareness of bank employees about the importance of green finance and external factors for the sustainable development of both the bank and society. In addition, this serves as a basis, a prerequisite for bank planners, managers, and leaders to be able to formulate and implement an appropriate strategy, maximize resources to maintain and enhance the effectiveness of an organization.