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Proceedings ArticleDOI

Green Banking : One Effort To Achieve The Principle Of Good Corporate Governance (GCG)

25 May 2015-pp 128-132

AbstractEnvironmental damage that occurs in most of the Earth causing environmental movement nowadays in various fields with the term green, eco. One of them is in

Topics: Sustainability (52%)

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Journal ArticleDOI
Abstract: Banks offer loans to support many projects; however, some of these projects may not give adequate consideration to the environment. Little is known regarding the extent to which banking customers experience guilt when discovering that their bank supports projects that disregard the environment. An experiment with 313 participants was conducted, and the results showed that customers do experience guilt when discovering that their bank supports projects that do not give adequate consideration to the environment. This study found that guilt drives perceived consumer effectiveness and negative word‐of‐mouth regarding banking projects that neglect environmental considerations but not attitudes towards green banking. Negative word of mouth, but not the attitude towards green banking, mediates the effect of perceived consumer effectiveness on the intention to use green banking services. Negative word‐of‐mouth, rather than attitudes towards green banking and its perceived consumer effectiveness, drives the intention to use green banking services. These findings imply that banks need to encourage their customers to perceive that they are eco‐friendly to avoid a significant loss of customers.

5 citations


Book ChapterDOI
01 Mar 2021
Abstract: There is a global concern over climate change issues. The banking sector is expected to join the initiatives in solving environmental issues, even though banking sectors have no direct contribution to environmental damage. Banking commitment to environmental issues is required. The banking sector should have a responsibility for monitoring and managing the impacts of the ecological effects as the result of their business activities. The advantages of green banking implementation are that bank can avoid the use of paper by utilizing online transaction for their daily operation such as internet banking, SMS banking, and ATM. This will bring in the paperless operation into the banks, which in turn will reduce the logging of the forest. Banks also can develop an environmentally friendly lending policy for their business activities. This research aims to determine the impact of green banking daily operation, green banking policy (GBP), capital adequacy, non-performing loan (NPL), bank efficiency, and bank liquidity on bank profitability. The sample of this research is the Indonesian banking sector during the period 2012–2016. The results showed that green banking daily operation, capital adequacy, and bank liquidity have a positive effect on bank profitability. GBP and bank efficiency negatively affect bank profitability, while the NPL did not have a significant impact on banks’ profitability.

3 citations


12 Jan 2004

3 citations


Journal ArticleDOI
Abstract: This paper aims to ascertain the benefits that Islamic and conventional banks in Bangladesh can reap by implementing green banking, and also the drivers that motivate banks to behave environmentally. The Green Compliance Index (GCI) was introduced here to measure banks’ environmental behaviour. It was prepared based on central bank guidelines. In this study, with the participation of all 40 private commercial banks (PCBs), 32 conventional banks and 8 Islami Shariah-based PCBs, firm specific variables were collected through content analysis of the GCI. Structural equation modellingpartial least squares (SEM-PLS), together with the bootstrapping method, were used to evaluate the research data. These were collected and sorted from the FY annual report of 2018. For further support, a Generalized Linear Model (GLM) was used to assess the outcomes. The results show that the effects of green compliance on possible benefits are significantly higher for Islamic banks. In contrast, these banks comply less with the green banking codes than conventional banks do in Bangladesh. Company size and the independence of bank directors appear to have a significant influence on compliance with the green banking codes, while governance does not show such an association for either group of banks. As Islamic banks have a greater scope to attain benefits, policymakers should introduce more interactive green banking products and loan schemes for prospective consumers, especially in industrial sectors where there is a greater possibility of being sustainable and environmentally friendly. Based on the findings, policy recommendations are made for practitioners, regulators and future researchers.

2 citations


Cites background from "Green Banking : One Effort To Achie..."

  • ...In the literature, we found that some researchers (Clark, 2015; Dialysa, 2015; Radu, 2012; Iraldo et al., 2009; Amore et al., 2015; Bunget et al., n.d.) indicated a relationship between good governance and better environmental performance....

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References
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Journal ArticleDOI
Abstract: Purpose – The authors perform a large‐scale literature review and use conceptual theory building to introduce the concept of sustainability to the field of supply chain management and demonstrate the relationships among environmental, social, and economic performance within a supply chain management context.Design/methodology/approach – Conceptual theory building is used to develop a framework and propositions representing a middle theory of sustainable supply chain management (SSCM).Findings – The authors introduce the concept of sustainability – the integration of environmental, social, and economic criteria that allow an organization to achieve long‐term economic viability – to the logistics literature, and position sustainability within the broader rubric of SSCM. They then present a framework of SSCM and develop research propositions based on resource dependence theory, transaction cost economics, population ecology, and the resource‐based view of the firm. The authors conclude by discussing manageri...

2,711 citations


Journal ArticleDOI
Leora Klapper1, Inessa Love1
Abstract: Recent research studying the link between law and finance has concentrated on country-level investor protection measures and focused on differences in legal systems across countries and legal families. Klapper and Love extend this literature and provide a study of firm-level corporate governance practices across emerging markets and a greater understanding of the environments under which corporate governance matters more. Their empirical tests show that better corporate governance is highly correlated with better operating performance and market valuation. More important, the authors provide evidence showing that firm-level corporate governance provisions matter more in countries with weak legal environments. These results suggest that firms can partially compensate for ineffective laws and enforcement by establishing good corporate governance and providing credible investor protection. The authors' tests also show that firm-level governance and performance is lower in countries with weak legal environments, suggesting that improving the legal system should remain a priority for policymakers. This paper - a product of Finance, Development Research Group - is part of a larger effort in the group to study corporate governance around the world.

1,040 citations


Posted Content
Abstract: The study argues that commercial banks pose unique corporate governance problems for managers and regulators, as well as for claimants on the banks' cash flows, such as investors and depositors The authors support the general principle that fiduciary duties should be owed exclusively to shareholders However, in the special case of banks, they contend that the scope of the fiduciary duties and obligations of officers and directors should be broadened to include creditors In particular, the authors call on bank directors to take solvency risk explicitly and systematically into account when making decisions or else face personal liability for failure to do so

772 citations


Journal ArticleDOI
Abstract: Companies do have ethical responsibility and are not protected by limited liability from the consequences of their actions. A company's record and the preception of its ethics affect its reputation and ensure long term success or failure. The financial community has a history of placing moral considerations above legal or opportunistic expedients. But we are often exposed to moral dangers and the dangers of contamination are increasing. Deregulation and the technological revolution are sharpening ethical conflicts. Bankers' role is one of stewardship based on trust. We are trusted by those who ask us to look after their money and we have a duty to lend that money responsibly. Banking is about rewards reflecting real risks and ethical considerations form an important part of our risk-taking activities. The welfare of our borrowing customers, in good times and bad, is of major concern in any business proposition. Sometimes commercial considerations can be at odds where ethics and politics combine, for example, on the LDC debt question. We depend on people to run our business and to reflect our ethical standards. We have to let our people know what is expected of them and help them to avoid pressures and temptations. A bank's responsibility extends to Government, customers, shareholders, staff and the community. In the future, as we face increasingly complex and conflicting issues, our resolve and commitment to ethical behaviour will be tested.

90 citations


30 Nov 2012

74 citations