THE IMPACT OF GREEN BANKING ACTIVITIES ON ENVIRONMENTAL PERFORMANCE: A YOUTH-DRIVEN PERCEPTION STUDY IN INDONESIAN FINANCIAL INSTITUTIONS

• Main Author: Setyorini, Maharestu
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/86745
• Institution: Institut Teknologi Bandung

Green banking, an essential strategy in the financial sector, is gaining momentum as it aims to balance environmental sustainability with economic growth. This approach, where banks promote sustainable behavior among clients, finance eco-friendly projects, and implement green policies, has significant potential to address Indonesia's pressing environmental challenges. By focusing on the perceptions of the younger generation in driving these initiatives, this study not only highlights their critical role but also provides hope for advancing both environmental and financial sustainability. The potential of green banking to address these challenges is significant, and this study aims to provide valuable insights by examining how green banking activities influence the environmental performance of banks in Indonesia, with an emphasis on youth-driven perceptions. This research employs a precise quantitative approach, ensuring the reliability of the findings. Using a structured questionnaire, data was collected from 314 young Indonesian bankers, ensuring a diverse representation of the younger demographic within the financial sector. Based on a Likert scale, the questionnaire evaluates environmental performance, green banking activities, and sources of green financing. The hypotheses were tested using structural equation modeling (SEM) with the SmartPLS program, and the correlations between variables were carefully analyzed. The findings of this study could significantly impact financial sustainability, environmental outcomes, and banking practices, emphasizing the importance of the research and its reliable results. The study found a strong and positive relationship between green banking activities and the environmental performance of banks, showing that these elements reinforce each other. Additionally, green financing was identified as a critical mediator in this relationship. The study illustrates that activities such as reducing paper consumption, promoting Internet banking, and providing loans for environmentally friendly projects significantly enhance the environmental performance of banks. In conclusion, green banking activities improve banks' environmental performance, with green financing as a crucial mediator. This emphasizes the importance of incorporating green initiatives into the banking sector to achieve sustainable economic growth. The active involvement of the younger generation in promoting and implementing these projects is vital for long-term success. This research is unique as it explores previously unknown areas by analyzing the perceptions of the younger generation of Indonesian bankers regarding the impact of green finance using SEM. It provides novel insights into how green banking activities can enhance environmental performance and support sustainable practices in developing nations. The study deepens our understanding of how generational trends influence the adoption and effectiveness of green banking solutions, emphasizing the importance of young bankers' perceptions of this issue.