ABSTRACT Despite the critical role of sustainable finance in achieving a low‐carbon economy, how green leaders and organisational culture drive meaningful sustainability change remains unclear. Drawing on social norms, social learning and social identity theories, we examined the effect of green leaders and green organisational culture on employees' green behaviour and organisational environmental sustainability. We analysed survey data from Australian finance industry employees ( n = 117) using partial least squares structural equation modelling (PLS‐SEM). The results suggest that leaders' environmental knowledge is a key antecedent to green transformational leadership and leaders' green behaviour. Importantly, green transformational leadership and leaders' green behaviour significantly influence green organisational culture, which further drives employees' green behaviour and organisational sustainability. Furthermore, the positive effect of leaders' green behaviour on employees' green behaviour was confirmed. The study highlights the importance of green leaders and green organisational culture for the financial sector. Practical implications are outlined for policymakers.
Yang et al. (Mon,) studied this question.