KIM Rebecca ChungHee
Department Ritsumeikan Asia Pacific University College of International Management Position Professor
|Research paper (Other)
|Green and Ethical Banking: Demand and Supply Perspectives from Bankers, Corporations, and Heads of Households in Malaysia
|Banker's Journal Malaysia
|Volume, Issue, Page
|Author and coauthor
|Dr Tan Hui Boon; Dr Patricia Ang Mei-Mei; Dr Pek Chuen Khee
|Banks in their role as financiers and business advisors can strongly impact the economy and the environment. From a triple bottom line perspective, profits and financial success alone are insufficient. Banks are increasingly being evaluated on ethical and sustainability performance, and avoidance of environmental damage. This article details our research on the business potential of ethical banking, green banking and green loan initiatives, incorporating both the demand and supply perspectives.
Participants were senior bankers and stakeholders (Study 1), managers of 169 corporations (Study 2), and 203 heads of households (Study 3). Qualitative and quantitative methods were utilised. In-depth interviews with senior bankers and stakeholders revealed primary motivations, drivers of sustainability, conceptualisation of green and ethical banking, and the challenges faced.
Over 60% of individuals’ and corporate respondents’ banking decisions were influenced by ethical and green banking. Additionally, two in five corporations reported a positive intention to apply for green loans, particularly larger enterprises, Multinational Companies (MNCs), and organisations with existing sustainable practices or policies. For heads of households, the following green banking initiatives were important: online banking, the availability of green car loan packages, and banks’ support of local environmental initiatives and human development projects.
The results revealed a strong demand from both corporations and individuals for ethical banking, green banking, and initiatives such as green loans. Banks can thus create greater public awareness regarding their ethical practices, introduce and promote green banking initiatives, and provide leadership in the area of sustainability. Recommendations are provided on how banks can enhance green loan schemes.