Adoption of green banking innovations: Drivers and outcomes

The shift toward environmentally sustainable finance has placed increased pressure on banks, especially in emerging economies, to align operations with global climate goals. Jordan's banking sector faces unique institutional, regulatory, and societal expectations, creating a timely need to investigate the mechanisms driving and resulting from the adoption of green banking. This study empirically investigates the drivers and outcomes of adopting green banking innovations within Jordan's financial institutions. Focused on key factors such as regulatory pressure, corporate social responsibility (CSR) orientation, operational efficiency, global green trends, and market demand for green products, the research examines how these elements influence the integration and effectiveness of green banking practices. Data were collected from senior executives and managers across various banks in Jordan, with 217 validated responses utilized for analysis. Smart partial least squares software for hypothesis testing was applied. The findings reveal that regulatory pressures, CSR orientation, and global green trends significantly promote the adoption of green banking innovations. Furthermore, the results demonstrate that green banking practices significantly enhance operational efficiency and contribute to environmental sustainability. The study underscores the importance of a strategic commitment to environmental principles in the banking sector, emphasizing how such commitments facilitate operational improvements and support broader sustainability goals. This research contributes to an understanding of how banks in emerging economies, like Jordanian banks, can adopt sustainable practices and enjoy financial and environmental benefits. The study implications are that regulators and banks must enhance their green policies and practices to ensure sustainability in the financial sector.