THE ROLE OF GREEN BANKING IN PROMOTING SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY
Abstract
This study examines the role of green banking in promoting sustainability and corporate social responsibility (CSR) within Nigeria’s banking sector, addressing four key objectives: the extent of green banking integration, its environmental impact, its role in CSR fulfillment, and its relationship with financial performance. Using a mixed-methods approach, the research collected quantitative data from 350 banking professionals through structured questionnaires, supplemented by secondary data from regulatory reports and sustainability disclosures. Findings reveal that Nigerian banks have achieved moderate-to-strong integration of green banking practices (mean score = 3.84/5), with energy-efficient technologies (4.05) and policy frameworks (4.12) showing the highest adoption. However, gaps persist in employee training (3.65) and paperless transaction systems (3.55), indicating uneven implementation. Environmental impact analysis demonstrates significant reductions in carbon emissions (4.12) and energy consumption (4.02), though tracking of financed emissions (Scope 3) remains limited to only 31% of banks. The study highlights how green banking has transformed CSR strategies, with development banks leading (4.21) due to policy mandates, while microfinance institutions lag (3.72) due to resource constraints. Financially, green banking enhances profitability (R² = 0.57), primarily through cost savings (β = 0.42) and customer retention (β = 0.31), though green loan portfolios (3.69) require further risk assessment frameworks. The study concludes that while green banking in Nigeria has evolved beyond regulatory compliance into a strategic business imperative, full sustainability integration requires addressing behavioral, operational, and reporting gaps. Recommendations include mandatory Scope 3 emissions disclosure, workforce capacity building, and targeted incentives for smaller banks. These findings contribute to the global discourse on sustainable finance in emerging markets, offering policymakers and bank executives actionable insights for aligning financial services with environmental and social goals.
Keywords: Green banking, sustainability, corporate social responsibility, financial performance, Nigeria, environmental impact
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