Value systems and their effect on organisational practices are an important topic of on-going research. Particularly in the context of environmental crisis, the role of alternative internal values and their impacts becomes increasingly important. The current study aims to gain insight into how organisational value systems shape organisational practices (specifically, green banking disclosure practices) and, in turn, impact firm performance.
Our study presents an analysis of seven years of data sourced from banks (secular and religious) in Bangladesh that disclose green banking information. This data is supplemented by qualitative evidence from 11 semi-structured interviews with bank managers to obtain a more in-depth understanding of the phenomenon.
Our findings indicate that banks' alternative value systems positively affect their green disclosure practices. Further, our findings indicate that while environmental disclosure has a positive effect on banks' overall firm value, this positive effect is further positively moderated by their alternative value systems. Our interview data confirms that banks with alternative value systems adopt many green activities beyond regulatory compliance, motivated, as indicated by respondents, to protect and care for the natural environment as reflections of firms' internal value systems.
The study establishes that internal value systems of banks that have penetrated deeply into the internal operational philosophy are strategically important to ensuring green reporting contributes to improved market value.
The effect of organizational values on other aspects of firm performance and evaluation is not well understood. The study aims to investigate and provide new information on this phenomenon in emerging economies, and particularly where these values align with greater global concerns such as green values. By providing a focus on non-performing loans, it provides new insights using religious and secular banks as comparators. As such, this research provides original insights into the role of values in the implementation and operationalization of those values.
1. Introduction
This study investigates how internal organisational value systems, that is, banks' non-financially focused value systems influence green banking disclosure practices. It does so with particular attention to how these value systems moderate the relationship between a bank's market performance and its green disclosures. As firms face growing pressure to adopt environmentally responsible practices, the dominant shareholder-primacy logic of corporate governance is increasingly questioned. This trend has been accompanied by intensified calls for regulatory reform and transparent reporting of green performance, particularly in emerging markets. These developments have introduced complexity, politicisation, and contextual variability, challenging conventional frameworks for evaluating the link between disclosure and environmental performance.
Among the regulatory innovations responding to these environmental concerns is the emergence of green banking regulation (Murray et al., 2006; Wu and Shen, 2013; Zhu et al., 2014; Bai and Chang, 2015). Green banking refers to the integration of environmental principles into financial services, particularly in lending practices, internal operations, and disclosure. In several emerging economies, central banks have played a critical role in institutionalising green banking practices, shifting them from voluntary efforts to mandatory policy frameworks. These reforms have been observed in countries such as Brazil, China, India, Indonesia, and Bangladesh. Green banking has since become a salient part of banking regulation in these contexts (The Guardian, 2014; Bose et al., 2018).
This article is motivated by several interrelated issues in the academic scholarship and in policy. First, it seeks to investigate whether green banking disclosures made by private-sector banks are positively valued by capital market actors. While much has been written on the social obligations of firms, including those in the financial sector, the relationship between green banking disclosure and firm value remains contested (Bose et al., 2021). This is especially true in contexts where profit-seeking firms are expected to invest in initiatives that may not yield immediate financial returns. The long-term implications of these practices on shareholder value remain empirically unsettled (Zhu et al., 2014; Bai and Chang, 2015; Cahan et al., 2016; Clarkson et al., 2013).
Second, the article aims to examine the role of internal contextual factors-specifically, an organisation's internal value system-in shaping the relationship between green disclosure and firm value. A key shortcoming in the existing literature is a failure to adequately account for such moderating variables (Bansal and Roth, 2000; Wagner, 2010; Bai and Chang, 2015 Brooks and Oikonomou, 2018; Cordeiro et al., 2017). Although the research acknowledges that firms operate within institutional and environmental constraints (Brammer and Millington, 2008; Khan et al., 2021a; Wagner, 2010; Jamali and Karam, 2018), less attention has been paid to how organisations' internal value systems, especially those rooted in ethical or religious commitments, shape strategic behaviour. As stakeholder expectations evolve, understanding how firms' internal values influence practices is essential for both theory development and practical application. Thus, in this study we introduce the firm's internal value system as a potential moderator. We believe that our study is particularly relevant and timely as new organisational forms such as social enterprises, hybrid organisations, and public benefit corporations ( Sheehy and Diaz-Granados, 2024; Sheehy, 2015) proliferate with each espousing values and commitments that go beyond traditional profit motives. These organisations are not indifferent to financial performance, but they prioritise values such as environmental preservation, community wellbeing, and ethical conduct. As such, they challenge the assumption that financial value is the exclusive metric of corporate success.
A related motivation for the article stems from an interest in ethical business conduct following the on-going corporate scandals. Corporate scandals of various sorts have reinforced the view that ethics and internal value systems are integral to effective corporate governance and long-term sustainability. As Brammer and colleagues have argued, the integration of ethical considerations into corporate strategy is increasingly recognised as foundational for stable business growth (Brammer et al., 2007). Consequently, the internal value system of an organisation is no longer a peripheral concern: it has become central to discussions on governance, sustainability, and accountability.
Third, this study aims to contribute methodologically by demonstrating the potential of using a mixed-methods approach for generating richer insights. Previous research on green banking has largely relied on quantitative methods, typically regression analysis of secondary data (Bose et al., 2021; Khan et al., 2021a). While such methods are valuable for theory testing, they often lack explanatory depth. The current study addresses this gap by combining statistical modelling with qualitative interview data, allowing for a more nuanced understanding of the motivations and perceptions behind green disclosure practices. This methodological approach strengthens the robustness and interpretive validity of the findings. Accordingly, our study seeks to answer two central research questions:
Do alternative value systems in banks influence green disclosure?
Do such value systems moderate the relationship between disclosure and firm value?
Why and how do alternative value systems shape green disclosure and firm value?
The choice of investigating these questions in the context of the banking sector is deliberate. Banks play a fundamental role in economic development by channelling resources, allocating credit, and providing the financial infrastructure upon which economies rely (Wu and Shen, 2013). Importantly, banks are constrained by their need to maintain social legitimacy as they operate to access to public funds, whether through deposit insurance, central bank support, or broader systemic guarantees (Bose et al., 2018; D'Amico et al., 2016; Khan et al., 2021a). This privileged position gives rise to a heightened social expectation of responsibility and social validation of their activities. Unlike private firms in many other sectors, banks must account for their use of publicly sourced capital, a position which justifies the need for greater scrutiny of their social and environmental performance (Scholtens, 2009; Carroll and Shabana, 2010). The underlying argument of this article is straightforward: banks founded on alternative value systems are more likely to internalise green practices and engage stakeholders meaningfully. These institutions integrate environmental and social values and related goals into their organisational policy and operations, and which are likely to be appreciated by capital market actors in the form of higher firm valuations. In this respect, values-driven banks are expected to be better managed and more strategically aligned with long-term sustainability objectives (Brammer and Pavelin, 2006; Brammer and Millington, 2008).
Bangladesh offers a suitable context for exploring the research questions for a variety of reasons. First and most importantly, its banking sector is marked by a distinction between institutions grounded in secular profit-maximising principles and those informed by alternative value systems, such as religious values, as expressed in this case in the form of Islamic banking. Secondly, the sector is subject to comprehensive green banking regulations introduced by the central bank, requiring banks to incorporate environmental considerations into their operational policies. The regulation requires banks to adopt a precautionary approach toward environmental issues (Sheehy, 2019) and to implement environmental policy initiatives and related risk management in lending decisions (Bangladesh Bank, 2013a, b; The Guardian, 2017). These features of the Bangladesh banking system make it possible to examine how differences in internal value systems correlate with disclosure practices and firm performance within a shared regulatory framework.
Using panel data on private banks from 2008 to 2014—the period during which green regulations were introduced and hence the critical period for analysis—the study finds that green disclosure is positively associated with firm value. Furthermore, this relationship is strengthened in the presence of an internal value system based on religious commitments. To ensure the robustness of our findings, we used reverse causality tests based on a dynamic panel data model using the system generalised method of moments (GMM) method of Blundell and Bond (1998), as well as alternative proxies and controlling for selection bias using Heckman's (1979) two-stage model. Our interview results revealed that banks with alternative value systems had business models and operations that led them to develop and form a more environmentally and socially oriented approach than was the case with firms focused exclusively on shareholder returns (discussed in detail in Section 5.5).
The study makes three distinct academic contributions. First, it offers the first empirical examination of the effect of internal value systems on the green disclosure–performance relationship in the banking sector. Second, it introduces a mixed methods design to this area of research, combining quantitative and qualitative approaches of data collection. Third, it expands the scope of green banking research by drawing attention to the role of organisational values, an area previously underexplored (detailed discussions are in the conclusion section). Thus, it complements and extends other content analysis-based research (Khan et al., 2021a, b; Bose et al., 2021).
The structure of the article is as follows. Section 2 reviews the theoretical foundations and literature underpinning the study's hypotheses. Section 3 outlines the research context. Section 4 presents the data and methodology. Section 5 reports the findings and robustness checks. Section 6 concludes with implications for theory and practice.
2. Theory, literature, and hypotheses development
2.1 Theoretical framework: stakeholder theory
The current study is grounded in stakeholder theory, drawing on both its normative and instrumental strands. At its core, stakeholder theory challenges the exclusive focus on shareholder value, asserting that firms have responsibilities to a wider range of stakeholders, including employees, customers, communities, and the natural environment (Sheehy, 2005; Freeman, 2010). The normative strand of the theory posits that stakeholder inclusion is an ethical obligation, irrespective of financial implications. The instrumental strand, by contrast, argues that attending to stakeholder needs contributes to long-term firm success including protecting fund providers value (Freeman et al., 2010; Hillman and Keim, 2001). Donaldson and Preston (1995) explain that the ethical branch of stakeholder theory defines stakeholders as “persons or groups with legitimate interests in procedural and/or substantive aspects of corporate activity” (p. 71).
This dual perspective provides a useful framework for analysing how internal value systems affect green disclosure. The ethical foundation of stakeholder theory aligns with alternative value systems that prioritise firms' social and environmental objectives. In this regard, stakeholder theory is not only a model of ethical responsibility but also a strategic framework for sustainability. It suggests that firms integrating stakeholder values are likely to enjoy improved reputational capital, customer loyalty, and ultimately, stronger financial and market performance. Wicks (2014) and others have observed parallels between stakeholder theory and religious or ethically grounded value systems (Williams and Zinkin, 2010; El Ghoul et al., 2012). Both add a level of priority of community, integrity, and sustainability to profit considerations. Religious organisations, for instance, often embrace principles of stewardship, justice, and collective welfare-principles that mirror stakeholder commitments. These non-profit maximising values imply that firms guided by religious or ethical values may naturally align with stakeholder-oriented approaches, including green disclosure.
2.2 Organisational values, alternative value systems, and review of prior studies
Values are enduring beliefs or standards that influence behaviour and decision-making. Organisational values reflect the collective beliefs of a firm about what is desirable or appropriate. They shape strategic priorities, influence internal culture, and guide responses to external demands. In the organisational context, values are “generalised and relatively abstract superseding evaluative standards that define desirable ends and ways to achieve them” (George and Jones, 1997, p. 396). We adopt this definition given by Padaki: When these convictions are translated into relatively enduring practices they can be called organisational values. Managing an organisation's value system is an important strategic task’ (Padaki, 2000, p. 420).
Alternative value systems are those that de-emphasise short-term profit in favour of broader goals such as environmental protection, social inclusion, and ethical conduct. These systems are not exclusive to religious organisations, although religiously committed firms often embody them. The ethical prescriptions and behavioural norms embedded in religious worldviews-such as honesty, accountability, and care for the natural environment “creation”-can constrain managers' opportunistic behaviour and promote sustainable decision-making. Scholars have noted that such value systems can serve as a form of internal governance, shaping managerial discretion and aligning actions with ethical standards. Ray et al. (2014) argue that religious commitment functions as a self-regulating mechanism, deterring unethical behaviour and promoting socially beneficial outcomes.
Belief in continual surveillance by the divine, combined with moral guidance from sacred texts focused on pro-social actions and penalties for wrongdoing, combine within a firm and are expressed as ethical commitments of the firm which work as a restraint on self-interested behaviour. In this way, internal value systems can supplement or substitute for external controls, making them particularly relevant in environments with weaker regulatory enforcement.
In the banking sector, the empirical link between internal values and environmental disclosure has not been clearly established. While there is growing interest in CSR and sustainability within finance (see, e.g. Simpson and Kohers, 2002; Khan et al., 2009, 2010, 2011, 2014), no studies have examined how internal values interact with the effect of green disclosure on firm value. Even recent green banking studies have not considered this pertinent issue. To illustrate, Febriza's (2025) study examines how knowledge, sharia compliance, religiosity, and local wisdom influence green banking behavior but does not connect the effect. A literature review by Muchiri et al. (2025) examined themes in 59 articles and reported that the implementation of green banking is either direct, through active green lending and greening their operations or indirect through enhancing conditions. Further, their study identified key challenges namely regulatory handles, social economic and culture hinderances, transition risk and the high cost of compliance, greenwashing concerns, and weak investor confidence; however, it did not extend to examination of the interaction between internal values and the effect of disclosure on performance.
Collecting survey data (n = 302) from the Indian banking sector, Nagina (2025) investigated the influence of green financing activities and management of performance. They reported that green credit, investment, and carbon finance substantially correlated with banks' cash flow levels [1]. Further, Ragazou et al.’s (2022) research on the EU banking sector revealed that socioeconomic, governance, and technology factors positively affected the environmental performance of European financial institutions. By contrast, the current study addresses this gap by focusing explicitly on the role of organisational value systems in shaping the effect of green banking disclosures and firm value. Finally, previous green banking studies do not to use mixed methods with both primary data (interviews) and secondary data. As a result, previous studies lack nuanced and in-depth investigations and understanding of the issue. The current study addresses this gap.
2.3 Hypotheses development
Firms with alternative value systems are argued to behave differently from those pursuing profit maximisation alone. These firms are not indifferent to financial viability but are motivated by additional commitments, such as community development, environmental protection, and ethical integrity. They often operate in the space between traditional for-profit and non-profit models (Hansmann, 1980; Auteri and Wagner, 2007). Examples include social enterprises, cooperatives, and public benefit corporations (Sheehy, 2016; Yosifon, 2016; Sheehy and Diaz-Granados, 2024). These organisational forms demonstrate that internal values can significantly shape practices with effects in the external environment. Studies have shown, for example, that if a firm's internal value system reflects a religious commitment, there will be an influence on corporate decision making (Epstein, 2000; Omer et al., 2018). It is argued that religiously oriented decision-makers within a firm tend to display more ethical decision making and a greater commitment to implementing organisational values identified by them as ethical practices beneficial to the community and the natural environment (Epstein, 2000; Angelidis and Ibrahim, 2004; Brammer et al., 2007; Hopkins et al., 2014; Omer et al., 2018).
Within the banking sector, religiously committed banks offer a clear example of such value systems. Prior research suggests that these institutions exhibit greater ethical commitment, lower risk of misconduct, and stronger ties to community stakeholders environment (Epstein, 2000; Angelidis and Ibrahim, 2004; Brammer et al., 2007; Hopkins et al., 2014; Omer et al., 2018). They may also be more proactive in green reporting, seeing it not as a legal obligation but as a reflection of institutional identity. Hence, the study advances the following hypotheses:
A banking firm's alternative internal value system positively affects its green practices.
In addition to affecting disclosure behaviour, internal value systems may also influence how green disclosures are accepted by the market. Specifically, we argue that internal values of banks will amplify the positive effects of green disclosure on firm performance for several reasons. First, firms perceived as authentically committed to green activities will be more credible in their reporting, generating trust among investors and stakeholders. This trust can translate into improved firm performance, especially when disclosures are consistent with observed behaviour (Belal et al., 2015). Second, banks with alternative value systems are likely to engage in a broader environmental scan, considering not just the financial risk/return calculus but also social and environmental threats. This integrated perspective can lead to more informed decisions, reduced risks including reduced reputational risks, and ultimately improved long-term value. Third, when banks with alternative value systems effectively balance profit maximisation and stakeholders' expectations of community orientation and environmental care, they establish a reputation for trustworthiness in the market (Sheehy, 2005; Omer et al., 2018). As a result of this positive reputation, investors and other stakeholders increase their trust in these banks. This increased trust, in turn, is likely to augment firm value. Lastly, as the alternative value system signals a more balanced approach to addressing both shareholder and stakeholder interests (Sheehy, 2005), we argue that market performance of banks with alternative value systems will improve in the long run. Our reasoning is that the market will recognise and value the banks' efficient use of various resources to achieve broader stakeholder value, (including maximising shareholder value), as well as their management of risk by protecting the natural environment and social welfare. This effort will be positively accepted by the bank's providers of funding and other actors in the market. Formally stated
A banking firm's alternative internal value system positively moderates the relationship between green disclosure and firm performance.
3. The research context of Bangladesh
Bangladesh provides a compelling context for this study due to its response to its acute vulnerability to climate change: it has a highly proactive stance on environmental regulation. Ranked by the World Bank as the most climate-vulnerable nation among 170 countries, Bangladesh has nonetheless demonstrated strong economic growth, recently achieving middle-income status and aspiring to become a developed nation by 2041 (World Bank, 2016, 2017, 2018).
In response to its environmental challenges, Bangladesh has positioned itself as a regional leader in sustainable finance regulation. The central bank, Bangladesh Bank, has implemented significant policy measures to promote green banking. These include environmentally friendly lending policies, concessional refinancing schemes, and mandated credit allocations for green investments (United Nations Environment Programme [UNEP], 2015a; Bangladesh Bank, 2017; Bose et al., 2021; Khan et al., 2021a). In 2011, Bangladesh Bank introduced a phased green banking policy framework, requiring commercial banks to progressively adopt and implement environmental practices and disclosure mechanisms. This regulatory environment makes Bangladesh an ideal site for examining how mandated green practices interact with internal organisational value systems. The dual banking system comprising secular profit-focused banks and banks guided by religious or ethical values allows for comparative analysis of how alternative value systems influence environmental disclosure and market performance.
The study focuses on the period from 2007 to 2014, a time of regulatory transition that offers both contemporaneity and analytical distance. This timeframe enables an evaluation of how banks adapted to emerging green mandates and whether internal values shaped their strategic responses. Bangladesh's regulatory clarity, institutional variety, and exposure to environmental risk thus provide a rich setting for exploring the dynamics of green banking disclosure and firm value. Further, it offers a pre-pandemic normalcy that avoids the introduction of exogenous, volatile confounding factors.
4. Research design
4.1 Sample and data: phase 1
The sample for this study consists of all banks listed in Bangladesh from 2007 to 2014. The study omitted state-owned public banks, foreign commercial banks, and other types of banks because of the lack of publicly available data. Furthermore, after excluding banks with missing financial information and due to the application of a lead–lag analysis approach that used 30 banking firm-year observations (an approach requiring one-year-ahead firm value information), our study's final sample comprised 167 observations from 30 banks. Multiple sources were used to collect data. For example, financial and stock market data were collected from the Compustat Global database. Information on green activities was collected from various sections of banks' annual reports, such as the chairman's report, the statement of corporate social responsibility (CSR), and notes to the financial statements.
4.2 Measure of green banking disclosure
We used the Green Disclosure Index to measure the dependent variables. To measure the extent of green disclosure, we adopted the index developed by Bose et al. (2018), which comprises 21 green banking-related items [2] used in other studies (Bose et al., 2021; Khan et al., 2021a). Following these other studies, we employed a content analysis technique to quantify environmental disclosure (Khan et al., 2013; Bose et al., 2018). We applied a dichotomous procedure to measure green disclosure, whereby a banking firm was awarded a value of one if an item included in the checklist was disclosed and a value of zero if it was not disclosed—a procedure consistent with other studies (Bose et al., 2018). The total green disclosure scores were then computed as a proportion of the total disclosure score obtained by a banking firm divided by the maximum possible disclosure score. This figure was converted to a percentage. A higher green disclosure score indicates a banking firm's higher level of environmentally friendly activities. Furthermore, following prior studies (e.g. Bose et al., 2018), we employed Cronbach's alpha coefficient to evaluate the internal consistency of the Green Disclosure Index. Cronbach's alpha coefficient was 0.776, indicating that the items in the index captured similar underlying constructs.
4.3 Measuring banks' alternative internal value systems
To measure banks' internal value systems, we used banks' religious commitment/orientation as a proxy. Under Bangladesh Bank guidelines and the Bangladesh Security and Exchange Commission requirements, banks and listed companies are required to disclose the details of their operations, the nature of their products and services, and the structure of their boards. For the current study, the unit of analysis was information on the board and executive and the adoption and implementation of all spheres of banking operations based on a separate Sharia board approved by Bangladesh's central bank. These firm attributes helped to determine and distinguish banks with alternative internal value systems of banks (e.g. their religious values and commitment) and their business operations, from other secular banks that did not operate on religious principles.
While previous studies measure religious commitment or religiosity using different proxies, such as the belief systems of the Chief Executive Officer (CEO) or other top executives (McGuire et al., 2011; Mazereeuw-van der Duijn Schouten et al., 2014) or a firm's geographic distance from religious sites (Du et al., 2016), we examined the firm's operationalized religious commitment per se. Accordingly, if a bank had a Sharia board and Islamic Sharia principles ingrained in its day-to-day activities, products, and services, our study considered this as evidence of an alternative internal value system. To capture religious commitment, we used a dummy variable equal to 1 if a banking firm claimed Islamic Sharia-based operations, products, and services, and 0 otherwise. Information on banking operations based on Islamic Sharia was collected from annual reports and banking websites.
4.4 Phase 2: in-depth interviews
In phase 2, to address Research Question 2 (RQ-2), data was collected from 11 semi-structured interviews with bank managers. The interviews were conducted with executives of different Sharia-based private Bangladeshi banks that worked at the branch or head office. The study chose to use in-depth interviews, as this method is particularly useful for obtaining information on the “why” and “how” type of queries/factors and for identifying motivating forces that affect respondents' decisions and organizational practices. This methodological approach has been used by other scholars (Yin, 2013).
The interviews were conducted in two phases: first, at respondents' places of business between May and September 2014, and then at an agreed time between August and December 2018. Each interview lasted 50 min on average. Some interviews were conducted via telephone but only when face-to-face meetings were not possible. The interview questions focused on banks' value systems and their day-to-day operations as evidence of embedded value systems in relation to green banking practices and banking activities. The profiles of the respondents are presented in Appendix 1. In all cases, the study guaranteed anonymity to respondents and their affiliated banks, with explicit undertakings that any distributed data would be de-identified. An interview guide (see Appendix 2) was used for the interviews. During the interview data collection process, notes were taken for respondents who did not grant permission for interviews to be voice-recorded. The interviewer confirmed the notes taken during the interviews with each respondent. The interview data were analyzed in consideration of the study's research questions.
4.5 Empirical models and variable definitions
A ordinary least squares (OLS) technique was used to estimate all regression models. The lead–lag approach was followed in all our regression models to address endogeneity concerns and self-selection issues. We tested our hypotheses by estimating the following regression models:
where firm performance is measured by Tobin's Q, defined as the book value of total assets plus the market value of equity, minus the book value of equity divided by total assets (Cahan et al., 2016). We use Tobin's Q as a measure of firm value, as it reflects the firm's forward-looking performance, future growth prospects, and expected value in the future (Cahan et al., 2016; Bose et al., 2017). Moreover, because share price is a key input to Tobin Q's computation, in our study, changes in share prices reflect investors' reactions to green disclosures.
4.6 Control variables
In this study, we considered several control variables, an approach consistent with the literature. Larger firms tend to invest higher amounts in green activities to respond to stakeholder pressure as well as their own greater visibility (Bose et al., 2017; Bose et al., 2021). We measured firm size as the natural logarithm of total assets. We controlled for leverage, computed as total debt to total assets, with this variable considered to positively affect firm value through debt holders' monitoring activities (Roll et al., 2009; Bose et al., 2021). We controlled for firm profitability because profitable firms may have favorable investment opportunities that could enhance their value (Roll et al., 2009).
Firm profitability was calculated as income before extraordinary items, as a percentage of total assets. We also took other control variables, such as liquidity, firm age, foreign investors, share price volatility, sales growth, institutional investors, and government ownership into consideration, as they are likely to affect firm value, as argued in prior studies (Roll et al., 2009; Bose et al., 2021). Liquidity is measured as the average monthly trading volume relative to the total number of shares outstanding. Firm age is measured as the natural logarithm of the number of years since the firm's inception. Foreign ownership was measured as the percentage of shares held by foreign owners. Furthermore, in prior studies, control variables such as firm size, leverage, profitability, firm age, foreign ownership, institutional investors' ownership, and government ownership have also been shown to affect a firm's green disclosure. Therefore, these factors were considered, and their possible impact was controlled by our regression models. We also controlled for year effects in all regression models, and the Bangladesh Central Bank's green banking policy guidelines were captured. Significant coefficient values for green disclosure and the alternative value system in Equation (1) and for green disclosure × religious commitment in Equation (2) were expected if our study's Hypotheses 1 and 2 (H1 and H2), respectively, were supported.
5. Empirical results
5.1 Descriptive statistics and correlation analysis
Table 1 presents the descriptive statistics of the variables used in this study. The average green disclosure score of 0.306 indicates that banks in our sample disclosed 30.60% of the green activities listed in the Green Disclosure Index. The mean (median) firm value, measured by Tobin's Q, of banks in our sample is 1.101 (1.059), which is closer to the results of Bose et al. (2017) in the context of Bangladesh. Approximately 19.70% of the banks in our sample have an alternative internal value system. The mean foreign ownership is 2.70%, while the average institutional investor ownership is 13.90%. Furthermore, government ownership is 4.70%, slightly lower than the average of 4.80% of Khan et al. (2014), reflecting the industry differences in government ownership in Bangladesh. For the descriptive statistics of the other variables, please see Table 1.
Descriptive statistics
| Variable | Mean | Std. Dev | Median |
|---|---|---|---|
| Green disclosure | 0.306 | 0.265 | 0.286 |
| Alternative Internal value systems | 0.197 | 0.398 | 0.000 |
| Firm size | 11.438 | 0.690 | 11.505 |
| Leverage | 0.936 | 0.103 | 0.919 |
| Profitability | 0.011 | 0.018 | 0.012 |
| Turnover | 0.055 | 0.099 | 0.005 |
| Firm age | 2.362 | 0.813 | 2.398 |
| Foreign owners | 0.027 | 0.086 | 0.000 |
| Volatility | 0.028 | 0.010 | 0.026 |
| Firm growth | 0.221 | 0.179 | 0.218 |
| Institutional owners | 0.139 | 0.127 | 0.128 |
| Government ownership | 0.047 | 0.182 | 0.000 |
Note(s): This table presents the descriptive statistics of all variables included in our research models
Table 2 presents Pearson's correlations matrix showing the correlation values between the dependent and independent variables. The correlation analysis suggests that no higher correlation values exist between the variables, indicating the absence of any potential multicollinearity problem (Gujarati and Porter, 2009) in the models as the value is lower than the cut-off point of 0.80. The non-existence of multicollinearity is also confirmed by the results from running the collinearity test. The mean variance inflation factor (VIF) value of variables in our firm value model is 2.46, while the minimum VIF value is 1.27 and the maximum VIF value is 5.95, thus reducing any concerns about multicollinearity. The VIF value is deemed to be high if it exceeds 10 (Greene, 2008).
Correlation matrix
| [1] | [2] | [3] | [4] | [5] | [6] | [7] | [8] | [9] | [10] | [11] | [12] | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Green disclosure | [1] | 1.000 | |||||||||||
| Alternative Internal value | [2] | −0.068 | 1.000 | ||||||||||
| Firm size | [3] | 0.569*** | −0.012 | 1.000 | |||||||||
| Leverage | [4] | −0.029 | 0.329*** | −0.463*** | 1.000 | ||||||||
| Profitability | [5] | −0.166** | −0.332*** | 0.290*** | −0.634*** | 1.000 | |||||||
| Turnover | [6] | −0.461*** | −0.097 | −0.310*** | −0.048 | 0.222*** | 1.000 | ||||||
| Firm age | [7] | 0.163** | 0.010 | 0.324*** | 0.099 | −0.135* | 0.004 | 1.000 | |||||
| Foreign owners | [8] | −0.137* | 0.049 | −0.003 | 0.134* | −0.177** | −0.026 | 0.002 | 1.000 | ||||
| Volatility | [9] | −0.248*** | −0.156** | −0.225*** | −0.011 | 0.038 | 0.149* | 0.117 | 0.071 | 1.000 | |||
| Firm growth | [10] | −0.308*** | 0.147* | −0.168** | −0.150** | 0.191** | 0.175** | −0.222*** | 0.191** | 0.280*** | 1.000 | ||
| Institutional owners | [11] | 0.155** | −0.201*** | 0.055 | −0.034 | −0.032 | −0.178** | 0.079 | −0.066 | −0.196*** | −0.130* | 1.000 | |
| Government ownership | [12] | −0.015 | −0.111 | −0.007 | 0.033 | −0.014 | 0.048 | 0.244*** | −0.073 | 0.184** | −0.030 | −0.201*** | 1.000 |
Note(s): This table shows Pearson's correlations matrix. Superscript ***, ** and * represent significance levels at 1%, 5% and 10%, respectively
5.2 Multivariate regression results
Hypothesis 1 (H1) predicts that an alternative value system is positively associated with green disclosures. Thus, the coefficient of green disclosure is expected to be positive and significant in equation (1). We report on the regression results of our firm value models (Equation [1] in Model 1 and Equation [2] in Model 2) in Tables 3 and 4. The adjusted R-squared (R2) value for the model was 76.8%. The coefficient of the alternative value system was positive and statistically significant (β = 0.045, p < 0.05) in Model 1, suggesting a positive association between the alternative internal value system and green disclosure. This finding supports our first hypothesis (H1). The results are economically significant, with the coefficient estimate suggesting that if the value of the alternative value system increases by one standard deviation, the value of green disclosure increases by 1.49% relative to the sample's mean value.
OLS regression results of alternative internal value system on green disclosure
| Variable | Expected sign | Dependent variable = Green disclosure |
|---|---|---|
| Model 1 | ||
| Alternative internal value | + | 0.045** |
| (1.739) | ||
| Firm size | +/− | 0.061*** |
| (2.884) | ||
| Leverage | + | 0.885*** |
| (8.522) | ||
| Profitability | + | −2.829** |
| (-2.333) | ||
| Turnover | + | 0.344** |
| (2.103) | ||
| Firm age | + | 0.192*** |
| (4.730) | ||
| Foreign ownership | + | 0.134* |
| (1.746) | ||
| Volatility | – | 3.126* |
| (1.865) | ||
| Firm growth | + | 0.008 |
| (0.222) | ||
| Institutional owners | – | −0.041 |
| (−1.549) | ||
| Government ownership | – | −0.215** |
| (−2.314) | ||
| (0.019) | ||
| Constant | +/− | 0.524* |
| (1.956) | ||
| Year dummies | Yes | |
| R-squared | 0.768 |
Note(s): This table presents the ordinary least squares (OLS) regression results of the alternative internal value system on green disclosure. Model 1 presents the regression model of the impact of the alternative value systems on green disclosure. Superscript ***, ** and * represent significance levels at 1%, 5% and 10%, respectively. Numbers in parentheses are t-statistics
OLS regression results of green disclosure on firm performance
| Variable | Expected sign | Dependent variable = Firm performance | |
|---|---|---|---|
| Model 1 | Model 2 | ||
| Green disclosure | + | 0.062** | 0.047 |
| (2.000) | (1.484) | ||
| Green disclosure × Alternative internal value | +/− | 0.078** | |
| (1.990) | |||
| Firm size | +/− | −0.048*** | −0.050*** |
| (-2.884) | (-3.246) | ||
| Leverage | + | 0.965*** | 0.921*** |
| (8.522) | (8.128) | ||
| Profitability | + | −1.823** | −2.051*** |
| (-2.333) | (-2.670) | ||
| Turnover | + | 0.388** | 0.383** |
| (2.103) | (2.080) | ||
| Firm age | + | 0.041*** | 0.041*** |
| (5.730) | (5.613) | ||
| Foreign ownership | + | 0.134* | 0.115 |
| (1.746) | (1.528) | ||
| Volatility | – | 3.126* | 3.266* |
| (1.865) | (1.960) | ||
| Firm growth | + | 0.008 | 0.010 |
| (0.222) | (0.267) | ||
| Institutional owners | – | −0.072 | −0.070 |
| (-1.549) | (-1.489) | ||
| Government ownership | – | −0.158** | −0.158** |
| (-2.314) | (-2.298) | ||
| Alternative internal value | +/− | 0.000 | −0.019 |
| (0.019) | (-1.074) | ||
| Constant | +/− | 0.524* | 0.594** |
| (1.956) | (2.323) | ||
| Year dummies | Yes | Yes | |
| R-squared | 0.867 | 0.868 | |
Note(s): This table presents the ordinary least squares (OLS) regression results of green disclosure on firm value. Model 1 presents the regression model of the impact of green disclosure on firm performance. Model 2 presents the regression model of the interaction between green disclosure and the internal value systems (religious value). Superscript ***, ** and * represent significance levels at 1%, 5% and 10%, respectively. Numbers in parentheses are t-statistics
Furthermore, we expect a positively significant coefficient for the interaction term green disclosure × alternative internal value systems in Equation (2) for Hypothesis 2 (H2). In terms of the analysis for H2, as reported in Table 4, we find a positive and significant coefficient of the interaction (green disclosure × alternative internal value systems) variable (β = 0.078, p < 0.05). The sum of the values of green disclosure and the green disclosure × alternative internal value system is positive, and a linear relationship is found for the sum of the coefficients of green disclosure. The green disclosure × alternative value systems are statistically significant (F = 2.870, p < 0.05). Thus, H2 is supported in our study. Our results suggest that banks in Bangladesh with alternative internal value systems disclose more green activities, which in turn enhances firm performance. The results are economically significant, with the coefficient estimate suggesting that if the green disclosure is increased by one standard deviation, firms with a religious commitment will enjoy a 1.88% increase in firm value relative to the sample's mean value compared to firms without internal value systems.
The results for the control variables in Models 1 and 2, as reported in Table 3, indicate that firm size, profitability, and government ownership are negatively associated with firm performance, whereas leverage, turnover, firm age, foreign ownership, and volatility are positively associated with firm performance. The negative signs for profitability and firm size contradict our expectations. The likely reason for the negative association between firm size and firm performance is the substitution effect of green disclosure with bank size; that is, banks issuing environmental disclosures are larger in size, a finding similar to that of other studies (Bose et al., 2017). Furthermore, the negative coefficient of profitability implies that higher profitability signals a firm's maturity and lower potential for future growth.
5.3 Robustness test
Findings on the relationship between green disclosure and firm performance could be biased and affected by reverse causality. While a higher level of green disclosure creates a better relationship with key stakeholders that may facilitate the improvement of overall firm performance, banks with a higher level of performance may have slack resources (Waddock and Graves, 1997); thus, they can invest a greater amount of resources in environmental and green activities.
To address the concern that firm value in previous periods may affect the current year's green activities, we include lagged firm value as an independent variable in our baseline regression model following El Ghoul et al. (2011) and others (see Bose et al., 2021). We estimated this dynamic panel data model using the system GMM method (Blundell and Bond, 1998). Table 5 reports the GMM results, which indicate that the relationship between green disclosure and firm value is not affected by reverse causality.
GMM regression results of green disclosure on firm performance
| Variable | Expected sign | Dependent variable = Firm performance | |
|---|---|---|---|
| Model 1 | Model 2 | ||
| Green disclosure | + | 0.062** | 0.041 |
| (1.980) | (1.399) | ||
| Green disclosure × internal value | +/− | 0.114* | |
| (1.712) | |||
| Firm size | +/− | −0.061 | −0.093 |
| (−0.980) | (−1.258) | ||
| Leverage | + | 0.153 | 0.105 |
| (0.444) | (0.310) | ||
| Profitability | + | −1.658** | −1.693** |
| (−2.021) | (−2.194) | ||
| Turnover | + | 0.058 | 0.034 |
| (0.827) | (0.522) | ||
| Firm age | + | 0.117*** | 0.121*** |
| (2.883) | (3.155) | ||
| Foreign ownership | + | −0.005 | −0.018 |
| (−0.142) | (−0.595) | ||
| Volatility | – | 1.032 | 1.129 |
| (0.969) | (1.132) | ||
| Firm growth | + | 0.037 | 0.033 |
| (1.184) | (1.069) | ||
| Institutional owners | – | 0.012 | 0.009 |
| (0.265) | (0.191) | ||
| Government ownership | – | 0.041 | 0.046 |
| (0.388) | (0.459) | ||
| Firm performance | +/− | 0.341** | 0.283* |
| (2.054) | (1.938) | ||
| Firm performancet-1 | +/− | −0.173* | −0.182** |
| (−1.780) | (−1.967) | ||
| Internal value systems | +/− | 0.329 | 0.298 |
| (1.055) | (0.942) | ||
| Constant | +/− | 1.264 | 1.740 |
| (1.317) | (1.558) | ||
| Year dummies | Yes | Yes | |
| AR(1) | 0.948 | 0.239 | |
| AR(2) | 0.495 | 0.807 | |
| Sargan test | 0.975 | 0.994 | |
Note(s): This table presents the generalised method of moments (GMM) regression results of green disclosure on firm value. Model 1 presents the regression model of the impact of green disclosure on firm performance. Model 2 presents the regression model of the interaction between green disclosure and the alternative internal value systems. Superscript ***, ** and * represent significance levels at 1%, 5% and 10%, respectively. Numbers in parentheses are z-statistics
In addition, the statistically insignificant result from Sargan's over-identification test due to instrumental variables confirms the validity of the over-identification restriction. Serial correlation tests for first-order autocorrelation (AR[1]) and second-order autocorrelation (AR[2]) also show that no serial correlation is present in our research models. Therefore, specification tests for all estimated regression models show that the estimations are unbiased and consistent. Overall, our study finds evidence that the internal value systems positively influence green disclosure, and that the firm value–green disclosure relationship is positively moderated by alternative internal value systems (banks' religious commitment).
5.4 Sensitivity analyses
To ensure the robustness of our results, we perform several additional tests. First, we unscale green banking disclosure as a proxy for green disclosure, as suggested in the literature (Bose et al., 2021). The results are not reported in a table form for brevity; however, they show that our findings remain qualitatively similar to our main findings. Second, endogeneity and self-selection bias could affect our results in the firm-value model (Equations [1] and [2]). To address endogeneity issues, we use a lead–lag approach as well as the system GMM method (Blundell and Bond, 1998) to assess endogeneity issues arising from reverse causality. We found consistent results with our main findings.
5.5 Interview findings: (RQ-2)
As previously mentioned, to answer RQ-2, we collected data from interviews. Respondents indicated that their banks' internal value system, deeply embedded in their internal business operations, influenced the development of green banking practices in these operations. Simultaneously, they acknowledged that regulatory initiatives did influence green banking practices in Bangladesh. Specifically, respondents identified the banking regulator, Bangladesh Bank, and the government as having the greatest influence. They further claimed, however, that many of the green initiatives they developed and undertook were not in response to these external pressures but were adopted from the inception of their banking operations and rooted in their religiously informed alternative value system. These views are evident in the responses below for respondents working in a first-generation Islamic bank.
Respondent 1 shared:
We built up our CSR foundation before 2000 as our banking sponsor directors wanted us to manage zakat [compulsory donation as per Sharia law] and other money efficiently. From that foundation, we engaged in numerous social and environmental activities, charities, assisting vulnerable people in society and supporting charitable organisations locally.
Respondent 2 added:
When the central bank issued its regulations, the practices became more structured as the banks needed to report on their green and environmental activities and performance. At that point, all the banks operating based on Islamic [S]haria established trust funds for CSR and environmental activities and programs.
Multiple respondents (respondents 2, 3, 5, 7, and 8) provided additional insights into the emergence of green issues in their banking practices and Islamic value systems. In their view, religious values are directly associated with protecting the natural environment, a matter also emphasized in Bangladesh Bank's guidelines. As stated by Respondent 8:
Protection of nature—being part and taking care of natural creation is a part of our Iman [faith] assigned to us by Allah [God]. It was easy for us to incorporate this [regulation] into our internal operations.
Furthermore, respondents shared that their bank's value systems, drawing on religious values, affected other aspects of their operations and induced them to contribute more to societal causes and green activities. For example, Respondent 4 added that when customers defaulted or failed to pay on time, although a penalty was imposed, in line with Sharia law, the penalty money was not considered bank revenue. Instead, the penalty money was donated to the bank's CSR and environmentally dedicated trust funds. Similarly, in dealing with the central bank's requirements, Respondent 5 stated that:
We are required to open two accounts with the central bank against our letter of credit [L/C], like other commercial banks, and must deposit money in the L/C account. The central bank provides some interest on deposited money. This money is interest which is haram (forbidden) according to [the] Islamic Sharia principle. Accordingly, we donate these moneys to our CSR trust fund.
Many respondents (3, 6, 8, 9, and 10) reported that earlier central bank guidelines for incorporating environmental risk management when evaluating client loans and advances are also reflected in religious guidelines. As respondent 6 observed “We appreciated the central bank guidelines in this line and adopted them immediately”. These respondents also indicated that when firms involved themselves in implementing green guidelines and practices, they needed to balance these green goals against shareholders' funds/money; however, their board members are supportive in their endeavours to balance the interests of shareholders and stakeholders.
Other respondents (1, 3, 6, 7, 8, 9, and 10) reported that environmental sustainability, ethical banking, community involvement, and CSR activities were deeply rooted in fundamental Sharia guiding principles. Respondents reiterated several times that, as a result, the adoption of green practices was not difficult for their banks. However, they argued that because Bangladesh is not an Islamic republic by constitution, and because the entire economy is not operating on Sharia principles, the implementation of green practices and adoption of other CSR practices experience problems that may not otherwise arise. For example, banks' interest earned on deposits, part of the mandatory requirement, should be treated and recorded as bank profit; however, Sharia law forbids interest, categorizing it as haram (forbidden). Therefore, decision-makers in Sharia banks allocate earned interest to green and CSR trust funds.
From a religious point of view, project viability should not only be evaluated using profit parameters but should also be evaluated from a broader view of society, including an environmental perspective. Respondent 3 stated: “We can't take that earned revenue, it directly contravenes Sharia value, so we transfer that money to the trust fund”. Such respondents also indicated that when firms involved themselves in implementing green guidelines and practices, they needed to balance them against issues not generally experienced by conventional banks in Bangladesh.
Nevertheless, the respondents were not certain about the impact of green practices on the market. Respondent 10 evinced this view: “I do not have that information whether our green activities increase market value, but I know our founder directors and other members are happy to sacrifice some profit margin”. A similar view was expressed by Respondent 11: “You can tell me from the research finding[s] whether our bank's value increased: we do not do research, but I can share that our customers' base and employees' retention [have] increased”.
Other respondents (respondents 2, 3, 6, and 7) expressed the view that with the central bank's guidelines for incorporating green banking practices, the Bangladesh banking sector had undertaken a massive shift to green and environmental activities, with commercial banks are required to regularly report green banking practices to the central bank. Banks not adopting green activities at a fast pace were not considered to be in the central bank's “good books”. Such banks are believed to have denied access to other central bank benefits. Additionally, these banks were not allowed to promote themselves as care for society and the environment for strategic purposes. This empirical evidence is consistent with previous studies in this context (Bose et al., 2018; Khan et al., 2020, 2021b).
Overall, respondents shared the view that it was not merely regulatory guidelines that influenced their bank to adopt many green and environmental activities (e.g. cease granting loans to the ship-breaking industry and brick manufacturers without appropriate effluent treatment plans). Protecting environmental damages are also part of their own banking firm's internal value system. This value system robustly reflects non-shareholder interests and care.
6. Conclusion
The study investigates the relationship between green banking disclosure, and firm performance, while exploring the moderating role of alternative internal value systems in shaping these dynamics. Using data from private banks in Bangladesh, we find that alternative internal value systems-proxied by religious commitment at the firm level-positively influence green banking practices and moderate the relationship between green disclosure and firm performance. Our interview data confirms that banks with alternative value systems adopt many green activities beyond compliance with regulatory guidelines: as put forward by respondents, the firms aim is to protect and care for the environment as consistent with their firm's internal value systems.
This study contributes to the green banking disclosure and green regulation literature in several ways. First, while regulatory reforms have promoted green banking disclosure, few studies have examined whether such regulations are more effective when aligned with a bank's internal value systems. We address this gap by demonstrating that firms' internal value commitments can reinforce the business case for green disclosure, going beyond mere regulatory compliance. Prior research has largely overlooked this intersection, limiting analysis to regulatory outcomes or surface-level firm behaviours. Second, our findings highlight the broader influence of alternative internal value systems on banks' market performance. We show that when green practices are supported by deeply held organisational internal values, they enhance both disclosure level and financial outcomes (via increased firm value). This insight offers a novel contribution to the literature by illustrating how internal commitments-not just external incentives-shape sustainable banking practices (green banking practices in the current study). Third, our study advances the measurement of internal value systems construct. Previous studies used proxies such as CEO religiosity or geographic proximity to religious sites. By contrast, we operationalise religious commitment at the institutional level, examining its integration into products, service delivery, policy, and day-to-day operations. This richer operationalisation allows us to argue that internal value systems operate at the firm level, offering new insights for both researchers and practitioners concerned with ethical banking practices.
Our empirical context, Bangladesh, provides a valuable setting for this analysis. As a country vulnerable to climate change but also committed to sustainability goals, Bangladesh offers a unique view into how policy, regulation, and business practices intersect in a transitional economy. Using both primary (interview) and secondary data, we show how internal value systems embedded within private banks shape their green banking behaviours and long-term market performance. Triangulations of data collection and richer findings are therefore relevant for other emerging economies with similar institutional, governance, and regulatory landscapes.
The findings have many implications for practitioners. First, the findings suggest that aligning green activities with internal value systems will improve market performance and may offer a clear pathway to more sustainable banking practices. Banks' stakeholders, including funders pursuing profits, may wish to encourage this alignment, recognising that internal values can support both stronger green outcomes as well as profits. Second, the study also indicates that non-financial values, whether religious or secular, may enhance responsible governance, increase shareholder value, and improve firm green practices. Regulators, therefore, could develop regulations to encourage or incentivise banks to implement alternative value systems and to incentivise those that have already effectively institutionalised such a system. Given that the market appears to reward these endeavours; to maximise long term shareholder value, for regulators, the findings serve as potential “business case” when issuing additional instructions and developing future regulative guidelines. Lastly, the findings appear to provide a justification for bank decision-makers to establish alternative value systems internally should they wish to allocate additional resources to such endeavour. This budget allocation decision would be appropriate since in the end, the market rewards endeavours where fund providers receive long term increased firm value.
Nonetheless, caution is warranted in generalizing our findings. Our findings are drawn from a single country and industry. Further research should examine other sectors and emerging economies to test the broader applicability of our findings. Moreover, while religious values provided the proxy in this study, we do not advocate for any specific belief system. Rather, we argue for the value of internal commitments-religious or otherwise-in fostering long-term responsible business conduct. Lastly, given the correlational nature of the study, we also acknowledge that the results may not establish fully causation—whether value systems drive disclosure and firm value, or whether more profitable, better-performing banks are also more likely to adopt values-aligned disclosure.
Appendix 1
Respondents' profile
| Respondents | Designation and type of bank | Years of experience | Qualifications (Academic/Professional) | Face-to-face/Email response | Interview duration | Date |
|---|---|---|---|---|---|---|
| Respondent 1 | Bank Officer, 3rd generation Islamic bank | 5 | BBA, MBA, MPA | Face-to-Face | 40 min | May 2014 |
| Respondent 2 | Vice President, 1st generation Sharia bank | 12 | Bachelor and Master of Commerce | Face-to-Face | 35 min | June 2014 |
| Respondent 3 | Manager Accounts and Finance and SVP, 3rd generation Islamic bank | 10 | ACCA & ACMA | Face-to-face | 60 min | June 2014 |
| Respondent 4 | Bank Manager & SAVP | 15 | ACCA | Face-to-face | 50 min | July 2014 |
| Respondent 5 | SVP, Sharia-based bank | 8 | Master of Commerce, ACMA | Face-to-face | 50 min | July 2014 |
| Respondent 6 | General Manager Finance, private bank | 34 | Master of Commerce | Telephone | 55 min | Aug. 2018 |
| Respondent 7 | Bank Manager and Vice President, Islamic bank | 14 | MBA, ACMA | Telephone | 50 min | Dec. 2018 |
| Respondent 8 | Director, 1st generation Islamic bank | 15 | Master of Commerce | Face-to-face | 60 min | May 2014 |
| Respondent 9 | Manager (F&A), 2nd generation Islamic Bank | 7 | ACMA, MBA | Face-to-face | 60 min | Sept. 2014 |
| Respondent 10 | Vice President, private commercial bank | 10 | Master of Commerce | Telephone | 40 min | Nov. 2018 |
| Respondent 11 | Finance & Admin Executive, 3rd generation Islamic bank | 5 | MBA, FCMA | Face-to-face | 45 min | Aug. 2014 |
Appendix 2 Interview guide
Q-1: Could you please tell us how and why your bank is involved in green activities? Please cite some examples.
Q-2: What is the nature of your bank's green and environmental activities and how are these linked with your bank's core value system? Please cite some examples.
Q-3: Do you think that stakeholders (investors and others) appreciate your green banking initiatives and their impact on the market? Please cite some examples.
Q-4: How does the central bank influence green banking initiatives? Please cite some examples.
Notes
Giannarakis et al. (2016) identify the factors that influence the dissemination of environmental information based on a sample of 92 multinational firms for the period 2009–2013. Their study reported that environmental performance in terms of emission reduction initiatives and the country's risk premium positively affects the dissemination of environmental disclosures (see also Zafeiriou et al., 2023).
The exact wording of green banking scale items has not been included in the paper due to words limitations but is available on request (see also Bose et al., 2018).
