How Green Banking Practices Influence Employee Behavior and Sustainability

This is a sample work that examines how green banking practices influence employee behavior and promote sustainability. The study helps in understanding how voluntary green behavior can be encouraged through green HRM practices which can lead to both environmental and organizational benefits.

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THE IMPACT OF GREEN BANKING PRACTICES ON EMPLOYEES’ VOLUNTARY GREEN WORK BEHAVIOUR

There has been a rise of concern towards environmental concerns today and companies cutting across all markets have adopted sustainable methods in their operations and so has the banking industry. The concept of green banking also known as sustainable or environmental banking that entails the integration of environmental concerns in the banking process has become popular. These measures are directed not only towards reducing the number of negative effects on the environment drawn by banking activities but also towards changing the behavior of employees of the organizations to make them more environmentally friendly. Extant literature that relates to green practices in the banking context focuses on how green banking affects the VGB, particularly the mediating variables such as green HRM, employee engagement, and knowledge sharing. 

Mediating Role of Employee Green Behavior

In their study, Arulrajah and Senthilnathan (2020) give an understanding of the moderation of Employee Green Behavior in attaining sustainable performance in the banking industry. Their study also supports the idea that green banking practices can be insufficient for improving the sustainability performance of an organization. Hence, the active participation of the workers in green behaviors, which include the need for energy, waste, and recycling, is major in the green policy/ green-outcome gap. The authors assert that since these are voluntary behaviors intended to minimize the impact of environmental factors, shows that the employees supporting the environmental initiatives of the bank including the sustainability goals, help in improving the environmental performance of the bank. 

 This is supported by Arulrajah & Senthilnathan (2020) adding to the list of guidelines to promote VGB in an organization by pointing to the need to maintain a supportive environment that can encourage employees to engage in VGB. These involve availing all the appropriate materials, structures, resources, and rewards that enable the personnel to be proactive in environmental issues. The researchers also ensure that VGB focuses on the aspect of responsibility other than being in compliance with the organizational policies and responsibilities and being motivated to perform sustainably regarding the environment. This intrinsic motivation is encouraged when the employees of the organization feel that their behavior as well as the efforts they are putting in are in the best interest of the organization and that their efforts are appreciated by the organization.

Green HRM Practices and Knowledge Sharing 

Green service behaviors and green HRM correlation are studied by Rubel, Kee, and Rimi (2021). Green HRM is defined as HRM which prioritizes environmental management practices in employment recruitment, training, performance evaluation as well as the development of employees. According to the study by Rubel et al, (2021), green human resource management practices can foster a sustainable culture in an organization. : This shows not only the creation of awareness of the environmental problems being faced in the world but also empowers them with the skills required in undertaking VGB. 

 Another contribution of this study is the role of green knowledge sharing as a mediator between green HRM practices and green service behaviors of the employees. The authors say that when organizations support green knowledge, sharing increases the effectiveness of best green HRM practices. Employees who are informed about environmental problems are more likely to participate in VGB because they see the impact of their decisions and actions on the organization and the environment. The study also shows that green knowledge sharing initiates a chain of change where the green deputies drive their colleagues into embracing more green approaches within the company hence increasing the multiplier effect of green HRM practices within the organization.

Impact of Green Banking on Environmental Performance

Chen et al. (2022) give a real-world observation on the impact of green banking practices on green outcomes and financing in banks. Green financing as defined therefore relates itself to the products that finance environmentally sustainable development like power from renewable resources, energy conservation, and disposal of pollutants. The paper finds out that through green banking practices, the financial institutions that implemented green banking policy complain about positive standards and achievement on the environment and finance through green financing. 

 Chen et al., (2022) have stated that enhanced Green Banking Performance triggers a virtuous circle of green cumulative improvement process where the entities promote the efforts on Green Initiatives. This in return encourages higher levels of green work behavior by the employees as a volunteerism. The researchers also note that when employees can observe how, for example, green banking practices lead to energy or carbon savings or successful green financing projects then they are more likely to engage in VGB. This is because they get to see the outcome of their inputs and studies as meaningful leading to high morale and motivation. 

 However, according to the study that was carried out by Chen et al. (2022), green banking practices will also help the banks earn some reputational rewards as more customers and other stakeholders start to embrace sustainable banking. This rebounds the organizational commitment of the employees since they are proud to be associated with VGB an organization that embraces environmentalism

Pro-Environmental Behavior through Green HRM 

Saeed et al. (2019) describe the way the application of green HRM practices influences employees’ PEB at the workplace. In this regard, the study outlines several promising but hitherto unexplored green HRM activities such as green training, green performance systems, and other green employee activities. Hypothesis Three The organizational practices described above are identified to play important roles in affecting the employees’ perceptions of environmental sustainability and their propensity to participate in VGB. 

 The authors state that green HRMP enhances organizational climate where green WLB is promoted through encouraging voluntary green WB. For instance, the training programs for environmental policies, apart from educating the employees about environmental problems, equip them with environmental management strategies and methodologies. Green performance management systems, in contrast, include an environmental factor in performance evaluations and thus encourage employees to become green. Further, sustainable employee engagement practices like the formation of green teams and the formation of environmental committees offer the employees participation responsibilities within the organization’s sustainability process. 

 Saeed et al., (2019) say that green HRM practices are useful in encouraging pro-environmental organizational culture, whereby, employees exhibit discretionary efforts to act in an environmentally sustainable manner. In that sense, it helps to make the overall green banking practice more effective by improving the employees’ conduct in line with the sustainability culture instilled in the organization.

Employee Green Behavior in the Banking Sector

Srusti & Sawasdeep (2018) On the other hand, Iqbal et al. (2018) carried out a study in the Pakistani banking sector to investigate the roles of employees’ green behavior toward environmental sustainability. The analysis found that runoff prediction is more likely to be done when the employees in the banking sector think that their organization has a genuine care for environmental conservation. This perception is a result of green policies, practices, and leadership that surround a given organization. 

 Thus, the study of Iqbal et al. (2018) shows the relevance of organizational commitment to green practices in enhancing a culture of sustainable behavior in which employees participate in sustainability initiatives through extra efforts. According to the authors, when the employees have perceived that the organization is committed to environmental sustainability, they shall incorporate green values into their practices in their organizations. This internalization of green values is complemented by another factor the organization leadership, in which green leadership sets the green tone for the organization. 

 Besides, the study also points out that those employees who practice VGB are likely to be more satisfied with their jobs, and exhibit high levels of organizational commitment because they feel that they are working in the right way towards the achievement of the organizational goals and objectives set out in mission and vision statements. This therefore translates to increased levels of employee commitment and hence improved levels of retention, which are very essential for the sustainability of the green banking initiatives.

Comprehensive Review of Green HRM

Pham et al (2020) give a detailed analysis of green HRM and highlight its effects on different aspects of green behaviors among employees. As a part of the review, the focus is made on the role of green HRM in organizational sustainable practices and changing the staff’s behavior and attitude regarding environmental objectives. The authors therefore call for green HRM practices to develop a sustainability-minded workforce that will support the environment. 

 Reviewing the literature, Pham et al (2020) proposed four dimensions of Green HRM, which include Green recruitment, Green training and development, Green performance management, and Green employee relations. These components are postulated to be useful for supporting VGB since individuals within organizations thrive to support the cause of sustainability. For instance, green recruitment guarantee that the new employees of the organization are environmentally conscious so that they can promote the green culture and values of the organization, green training, and development policies and procedures ensures that the employees of the organization are equipped with adequate knowledge and skills to participate in VGB. 

 As with green operation management, Pham et al. (2020) also encourage green performance management, with the explanation that it aims to both set goals concerning the organization’s environmental performance and judge employees according to their effect on sustainability. Apart from popularizing green behaviors among employees this approach also holds environmental performance accountable to the organization’s performance management system. Additionally, some of the green employee relations processes, including the involvement of employees in the sustainability activities, and awarding of green achievements, go further in enhancing the compliance of employees to VGB.

Conclusion:

The literature emphasizes that green banking practice has a significant influence on employees’ voluntary green work behavior. This is not a mercantile relationship, but an entwined one, with green banking practices which are part of organizational culture and values. Green banking activities cover a broad spectrum that includes environmental management in delivery of banking services right to promotion of green banking financial solutions. However there are limitations, these strategies were more dependent on the active involvement of the employee. Essentially, it is the practice of green behaviors by the employees which is voluntary that unlocks the full potential of green banking practices through; conserving resources, recycling, and showing support for sustainability. 

 Such voluntary green behaviors can be encouraged by the practice of green human resource management (HRM). Green HRM tools such as green recruitment, training, Performance Management Systems, and Employee Green Participation in Sustainable Development are some of the ways through which organizational green values can be matched with the green actions of its employees. According to the literature, when the green HRM practices are well executed then the awareness is established, competencies are developed among the employees, and they gain ownership and intrinsic motivation to practice the green behavior. This intrinsic motivation is important especially because it makes the people to be more willing to go the extra mile rather than just conform to the corporate policies and work towards sustaining the organization. 

 Furthermore, it is important to mention the relationship between green banking practices, employee engagement, and environmental impacts are more interrelated. According to the literature, organizational commitment toward sustainability in terms of communication, leadership, and as use of sustainability objectives within organizations provides the necessary framework for developing VGB. The paper also showed that when employees feel that their organization is committed to sustainability, they are more likely to embrace sustainable practices in their tasks. This internalization is further enhanced by the fact that they can easily see the impacts of what they do, for instance, increased effectiveness in environmental performance, increased reputation, and positive feedback from their customers and other stakeholders. 

 Besides the effects of the target of environmental and sustainability management, VGB is also a response to the further development of the general organizational and employee climate. Miller, 2007; Investing in environmental initiatives can give a boost to the morale of the employees, make them more satisfied with their jobs, and have them committed to the organization. People who go to work with the perception that they are benefiting the environment will be motivated, satisfied, and committed in their workplace and will wish to perform extra duties. This, in turn, results in higher retention rates, happy employees, and thus a strengthened organizational culture that is aligned to sustainability. 

In the case of banks, attitudes to and implementation of the green policies are not for environmental purposes alone, but for more business values of sustainability. The literature points out that the benefits of green banking practices include improved resource efficiency translating to reduced costs, higher green finance revenues, and improved corporate image. These results generate a virtuous circle, which means that an increase in the company’s financial performance strengthens the organization’s commitment to sustainable development, which in turn encourages employees to persevere with VGB. 

 

Finally, it can be concluded the introduction and following of the green banks highly depend on the green behaviors of the employees. There is only one way to make sustainability programs long-term successful in the banks, and that is by following the tips given supporting the VGB. The green OM/HRM framework also means not only integrating green management practices into OM/HRM activities but also creating an organizational culture wherein the employees are willing to contribute to environmental initiatives. Everyone recognizes the major objective of embarking on the conservation of the environment on the one hand and achieving economic benefits on the other hand since banks are custodians of the future economy. 

References:

Arulrajah, A. and Senthilnathan, S., 2020. The mediating role of employee green behavior towards sustainability performance of banks. Journal of Governance & Regulation, 9(2), pp.92-102.

Chen, J., Siddik, A.B., Zheng, G.W., Masukujjaman, M. and Bekhzod, S., 2022. The effect of green banking practices on banks’ environmental performance and green financing: An empirical study. Energies, 15(4), p.1292.

Rubel, M.R.B., Kee, D.M.H. and Rimi, N.N., 2021. The influence of green HRM practices on green service behaviors: The mediating effect of green knowledge sharing. Employee Relations: The International Journal, 43(5), pp.996-1015.

Iqbal, Q., Hassan, S.H., Akhtar, S. and Khan, S., 2018. Employee’s green behavior for environmental sustainability: A case of the banking sector in Pakistan. World Journal of Science, Technology and Sustainable Development, 15(2), pp.118-130.

Saeed, B.B., Afsar, B., Hafeez, S., Khan, I., Tahir, M. and Afridi, M.A., 2019. Promoting employee pro-environmental behavior through green human resource management practices. Corporate Social Responsibility and Environmental Management, 26(2), pp.424-438.

Pham, N.T., Hoang, H.T. and Phan, Q.P.T., 2020. Green human resource management: A comprehensive review and future research agenda. International Journal of Manpower, 41(7), pp.845-878.

Li, Y., Zhu, K. and Wang, S., 2020. Polycentric and dispersed population distribution increases PM2.5 concentrations: Evidence from 286 Chinese cities, 2001–2016. Journal of Cleaner Production, 248, p.119202.

Pereira, L., Frenzel, M., Khodadadzadeh, M., Tolosana-Delgado, R. and Gutzmer, J., 2021. A self-adaptive particle-tracking method for minerals processing. Journal of Cleaner Production, 279, p.123711.

Zhang, D. and Du, P., 2020. How China “Going green” impacts corporate performance? Journal of Cleaner Production, 258, p.120604.

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