Does the environmental literacy of banking employees moderate the relationship between green banking practices and perceived sustainable performance? Evidence from an emerging nation

Purpose This paper aims to examine the relationship between green banking practices and perceived sustainable performance and measure the moderating role of banking employees' environmental literacy in the relationship between green banking practices and perceived sustainable performance. Design/methodology/approach A seven-point Likert-scale questionnaire was used to collect data from 422 banking employees, which was analyzed using partial least squares structural equation modelling (PLS-SEM). Findings The results reveal a significantly positive relationship between green banking practices and perceived sustainable performance. Further, the environmental literacy of banking employees partially moderates the relationship between green banking practices and perceived sustainable performance. These findings have implications for the government, policymakers, and bank management when implementing green banking practices, as employee education is critical to sustaining these practices. Originality/value This study is a pioneer in applying the theory of environmental identity (TEI), the Natural resource-based view (NRBV), and the ability-motivation-opportunity (AMO) framework, which emphasize the moderating role of environmental literacy among banking employees in adapting to green banking practices and in perceived sustainable performance. It makes a novel contribution to existing literature.