Impact of Green Financing for the Corporate Governance in the Banking Industry

8 Pages Posted: 10 Apr 2020

See all articles by Sajeewani Jayathilake

Sajeewani Jayathilake

University of Colombo - Economics Department

Date Written: November 30, 2019

Abstract

The term sustainability does not limit to environmental sustainability; it also is about economic sustainability as well. The banking industry has a significant role in sustainable economics. However, there are rear instances where the banking industry, which is the backbone of the financial flow of the economy, concern about the environment. Green finance is the latest concept which is discussed among many sustainable development discussions. This concept of green finance is the latest concept in the financial industry which merges environment sustainability with economic sustainability.

The banking industry is the backbone of the financial flow of the economy. Therefore, the banking governance is highly regarded and considered important for the value maximization. The study discusses how the latest concept of green financing contributes to corporate governance in the banking industry. This study is a systematic literature review by analyzing 69 quality journal articles written about green finance, banking industry corporate governance and the impact of applicability of green finance on the corporate governance in the banking industry. The literature screened six valid journal articles and studied in-depth to prove the objectives of the research. Many scholars and researches have discussed and debated on the effectiveness and impacts of environmental action. Further, many studies proved that environmental practices are able to generate a positive effect on the organization by reducing environmental footprints. It was proved that the reduction of environmental footprints causes reduction of cost and increase in organization performance. Hence the study ultimately proves the applicability of green financing is a reduction of environmental footprints and implementation of sustainable value framework. Throughout the study, the research deeply discuss the concept of green financing and how it is being practiced in the banking industry to add value for the banking industry.

Harming the environment through economic activities has become a common issue in the world. Therefore, it was understood that many issues such as an increase in carbon emission, global warming, acid rains and many negative environmental impacts have occurred. The banking industry is the backbone of the economic sector can contribute immensely to sustainability. Hence, the research was mainly done to understand the concept of green finance in-depth and its applicability to the banking industry. Further to understand the impact of green finance concept to the corporate governance in the banking industry. Focusing attention on the balance between economy and environment adds value to the banking industry as well as it is a contribution to sustainable development as well. Hence, it is clear that the banking industry contributed immensely for the achievement of sustainable development goals with the implementation of green finance concept.

The research revealed that the concept of green finance directly supports sustainable development goals. Green financing is the banking industry supports finance in retail banking, corporate/ investment finance, assets management and insurance. Therefore, this shows that this concept moulds the entire green supply chain in the economic sector. Therefore, the implementation of green financing is a development for the banking industry by adding stakeholder value for the baking sector. On the other hand, this is a development concept of sustainability of the economy and the environment. Further, the study revealed that the financial services industry, add value to the entire economy by initiating applicability of the green concept.

Hence the implementation of green finance in the banking industry has a great impact on banking governance. The study revealed that the applicability of green finance, not only improve the sustainable economy but also it has a great impact on banking governance as well. Hence this study contributes to the development of the banking industry as well as contributes to sustainable development as well. Hence this research paper can be taken as a guideline for the implementation of economic and environmental sustainability to the entire banking industry and ultimately the entire sustainability concept protected.

Keywords: Banking Governance; Development Banking; Development Finance; Green Finance; Sustainable Development

Suggested Citation

Jayathilake, Sajeewani, Impact of Green Financing for the Corporate Governance in the Banking Industry (November 30, 2019). OIDA International Journal of Sustainable Development, Vol. 12, No. 11, pp. 23-30, 2019. Available at SSRN: https://ssrn.com/abstract=3571734

Sajeewani Jayathilake (Contact Author)

University of Colombo - Economics Department ( email )

Reid Avenue
Colombo 3, Western 0094
Sri Lanka

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