It is the summary of a research paper presented in The 5th International Islamic Monetary Economics and Finance Conference (IIMEFC 2019), organized by Bank Indonesia at Jakarta, Indonesia. The full research paper is published in Journal of Islamic Monetary Economics and Finance.

1. BENEFITS THAT ISLAMIC AND CONVENTIONAL BANKS
CAN ATTAIN IN IMPLEMENTING GREEN BANKING
The 5th International Islamic Monetary Economics and Finance Conference (IIMEFC 2019)
Jakarta; 12-14 November, 2019
Presented by
KASHFIA SHARMEEN
Assistant Professor
Bangladesh Institute of Capital Market (BICM)
Study Associate
AHSAN MAHBUB YEAMAN
Managing Director
K&Y Ventures

2. BENEFITS OF
IMPLEMENTING
GREEN
BANKING
THE 5TH INTERNATIONAL ISLAMIC MONETARY ECONOMICS AND FINANCE CONFERENCE (IIMEFC 2019)
Jakarta; 12-14 November, 2019
A Study on
How Islamic & Conventional Banks can attain it
Presented by
KASHFIA SHARMEEN
Assistant Professor
Bangladesh Institute of Capital Market (BICM)
Study Associate
AHSAN MAHBUB YEAMAN
Managing Director
K&Y Ventures

3. URGE FOR
GREEN
▪ Worse worming effects of global climate crisis
▪ Financial institutions, specially banks can create and maintain green
revolution by implementing ‘go-green’ policy as it has a considerable
role in financing commercial projects for organizations.
▪ For our research, all 31 conventional banks and 9 Islamic banks have
been considered.
▪ Banking based on Islamic principles accounts for 20% of all deposits and
23% of all credit in Bangladesh (International Environment House, 2015)
1 2 3 4 5 6 7 8

4. RESEARCH QUESTIONS METHODOLOGY
✓ The prime methodology concern
of this research is to code these
initiatives undertaken by banks
(Source: Green Banking
Guideline by Bangladesh Bank
2012) and all 13 variables of
Green Compliance Index (GCI)
have been collected by a
primary survey for all 40 schedule
banks.
✓ Semi-structured interview of
related personal
✓ Collection of Secondary data
➢ What is the current state of green
banking practices by banks in
Bangladesh?
➢ What are the determinants that
motive banks to become green?
➢ What are the underpinning
causes that determine and
reinforce banks for being green ?
1 2 3 4 5 6 7 8

5. MODEL
SPECIFICATION
Figure 1: Underpinning and Benefits of Green Banking Compliance
1 2 3 4 5 6 7 8

6. DATA DESCRIPTION
• Data relating to governance, firm-specific
and benefit indicators were collected
directly from the annual report of 2018.
• Green Compliance Index (GCI) works as a
mediator.
• The extent of green compliance is
measured through content analysis by
using a self-developed index by
Bangladesh Bank guidelines.
• A score of 1 is given to a bank that
complied with an item of the developed
index and 0 otherwise.
• The green compliance index was sent to
the head office of all forty banks to get
firsthand information on the extent of
compliance based on the standards set by
the governing authority.
Results of
Structural Model Analysis
Figure 2: Structural Equation Modeling Results
Green Compliance Index &
Reliability Analysis
1 2 3 4 5 6 7 8

7. PATH COEFFICIENT AND HYPOTHESIS TESTING
All Banks Conventional Islamic
Hypothesis Relationship Coefficient t-Value Supported Coefficient Coefficient
H1 Governance → Green Compliance .062 0.269 No -.076 -.457
H2 Firm Specific → Green Compliance .394 2.206* Yes .132 1.154
H3 Green Compliance → Benefit .607 2.721* Yes .703* .744*
REGRESSION RESULTS
All Banks Conventional Islamic
Coefficient t-value Coefficient t-value Coefficient t-value
Size .053 2.089* .051 2.098* NA NA
Leverage NA NA NA NA .011 4.317*
Adjusted
R2
.172 .132 .727
F-Value 7.889** 4.403** 18.639**
MULTIVARIATE TESTS
All Banks Conventional Islamic
Independent
Variable
Dependent
Variables
Coefficient Coefficient Coefficient
Green
Compliance
Profitability 2.384* 1.285 .0005*
Reputation 1.407 .955 10.33
Accountability 4.619* 2.996** .0027*
Moral ground
9.591**
4.776** 35.193*
F-value 1.836** 2.734* 4.057*
Adjusted R2 .781 .774 .969
1 2 3 4 5 6 7 8

8. TEST FOR
MODERATION
➢ The difference in results between
conventional and Islamic banking in
various tests generated the possibility
of a moderating effect.
➢ Difference in slope test has been
carried out for all the paths in the
structural model, but only the path
from green compliance to the
outcome is found significant.
➢ As a result, we can conclude that
the level of benefits attained by
banks through green compliance is
higher for Islamic Banks than
conventional banks.
1 2 3 4 5 6 7 8

9. DISCUSSION AND CONCLUSION
• In our research model, governance and firm-specific have been incorporated with green banking compliance
index and benefits, i. and moral ground are examined. e. accountability, profitability, reputation
• In the first phase of examination, it has been seen that firm-specific have a positive association with green
compliance index whereas governance is not significantly associated.
• Although not significantly associated, the indicators used to measure the level of governance provided some
basic relationships.
• Furthermore, green compliance is also positively associate with the underlying results which means if banks
comply with green they will gain more benefits which increase their accountability, profitability and the most in
the moral ground. Only reputation receives a little lower attention.
• Moral ground as expected is high is Islamic banks which go accordance with the Islamic view. In the second
phase of examination we found that among three hypothesis, only execution of green banking provide more
benefits to Islamic banks over conventional banks.
• It is expected that consumers of Islamic banking would have a greater sensitivity toward Shariah principles and
support Islamic banks initiatives toward going green.
• A combination of Islamic and green ideas in Bangladesh, along with conventional banks, would certainly add
more value to the final consumers as well as create a sustainable future for the country itself.
1 2 3 4 5 6 7 8