Green Banking 5.0: An AI-Driven ESG and Climate Risk Framework for Sustainable Banking in India

The transition toward sustainable finance has become a strategic priority for the global banking industry due to increasing climate change risks, stricter environmental regulations, and the growing demand for responsible investment practices. In India, banks are progressively adopting digital technologies and environmentally sustainable financial services; however, the integration of Artificial Intelligence (AI), Environmental, Social and Governance (ESG) analytics, climate risk assessment, and carbon-aware lending into a unified decision-making framework remains limited (1). Existing studies primarily focus on digital banking and paperless operations, with comparatively less attention given to AI-enabled sustainability intelligence and predictive environmental risk management (2). The present study proposes a Green Banking 5.0 framework that integrates AI-driven analytics, ESG evaluation, climate-risk assessment, and carbon-conscious lending to support sustainable financial decision-making in the Indian banking sector. The study employs a descriptive and analytical research design using both primary data collected from 120 banking customers through a structured questionnaire and secondary data obtained from published literature, banking reports, government publications, and sustainability documents (3). Statistical analysis includes percentage analysis, comparative interpretation, and graphical representation to evaluate customer awareness, adoption of green banking services, and perceptions regarding sustainable banking initiatives (4).