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Sujai Adithya
Human Resource and Banking & Finance Expert
Asked a question 9 months ago

What does the term "Green Banking" mean?

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Sujai Adithya
Human Resource and Banking & Finance Expert

The concern for environmental sustainability by the banks has given rise to concept of Green Banking. The concept of “Green Banking” will be mutually beneficial to the banks, industries and the economy. Green financing is the part of green banking. 

Green banking means promoting environmental friendly practices and reducing your carbon footprints from your banking activities. Green banking aims at improving the operations and technology along with making the clients habits environment friendly in the banking business. It is like normal banking along with the consideration for social as well as environmental factors for protecting the environment.

Green banking as a concept is a proactive and smart way of thinking towards future sustainability. It is very important for the banks to be pro-active and accelerate the rate of the growth of the economy. Banks needs to apply morality of sustainability and responsibility to their business model, strategy and formulation for products and services, operations and financing activities and become stronger. By adopting the environmental factors in their lending activities banks can recover the return from their investments and make the polluting industries become environment-friendly.

The term "green banking" is gaining more and more popularity in recent years all over the world. It is becoming popular part of PR strategy of many financial institutions, but apart from that behind the advertisement there are initiatives and efforts within the banks to justify it. The aim of the current paper is to present a definition of the term "green banking", to offer a definition of its scope and based on these to propose a working green banking business model. The paper is entirely conceptual and is part of a broader research under way.