Abstract
The research adopts a qualitative approach to explore the institutionalization dynamics surrounding green banking adoption within the financial sector of Bangladesh, an emerging country. The primary data collection methods include thirty semi-structured interviews with employees from the banks and NBFIs and four interviews with the regulators. The interview data was triangulated through review of 13 policy documents for green and sustainable banking and the quarterly GB reports of the financial organisations from the year 2017-2022. Furthermore, the annual reports and websites of the central bank and the sampled organisations were reviewed along with various sustainability reports on Bangladesh by International organisations and local newspapers were also studied. The data analysis methods included a Flexible Pattern Matching (Sinkovics, 2018) and an Abductive Thematic Analysis (Braun and Clarke, 2021).The objective of the study is threefold. First, to explore the key forces compelling the adoption of green banking in Bangladesh. Second, to investigate how green banking principles become embedded into institutional framework of the banks and non-bank financial institutions. And third, to explore the sources of heterogeneity in green banking approaches across these financial organisations. Therefore, employing different lenses from the stream of institutional theories, the study developed a comprehensive theoretical framework. Specifically, the concept of institutional isomorphic pressures illuminated relative influence of coercive, normative and mimetic pressures driving green banking adoption (DiMaggio & Powell, 1983). The institutional change models by Greenwood et al. (2002) and Burns and Scapens (2000) were utilised to explore the processes of institutionalisation at the organisational field and within the organisations. Finally institutional logics perspective by Thornton et al. (2012) and the framework of Besharov and Smith (2014) facilitated nuanced analysis of varied assimilation of green practices across the banks and NBFIs.
Findings reveal the drivers of green banking in Bangladesh are influenced by a combination of coercive, mimetic, and normative pressures. It shows that the formal coercive pressures, especially regulatory mandates, played the most dominant role in compelling banks and NBFIs to implement green banking practices. Furthermore, normative pressures stemmed from global affiliations exert substantial influence over the sustainability norms and expectations. However, informal coercive pressure from customers and mimetic influences of industry leaders and local affiliations were found to be less significant in terms of green banking adoption.
Moreover, investigating multifaceted change processes, it traces how institutional change was precipitated by mounting climate change threats, providing stimulus for regulators to formulate new green banking regulations. It shows how the central bank of the country played an entrepreneurial role in initiating and guiding this process through regulatory directives, establishing a top-down framework for the institutionalisation of green banking. Result shows, through continuous multi-level interactions between field-dynamics and internal adaptations by organisational actors, green banking is embedded into the governance frameworks, policies and day-to-day operations. However, the study exposes variance across banks/NBFIs, as full re-institutionalisation remains incomplete.
The research further reveals how multiplicity and interactions of societal logics, each prioritizing divergent goals, created complexity within the banks/NBFIs. As such, the contested, estranged, aligned or dominant logic configurations shaped organisational approaches which led to the variation in their green banking practices.
The study expands theoretical conceptions by interlinking three different lenses of institutional isomorphic pressures, institutional change and institutional logic perspectives and contributes to sustainable banking, institutional theory, and organisational change literature. Furthermore, the implications inform policy and practice recommendations for developing sustainable financial systems, particularly within similar emerging country contexts.
| Date of Award | 3 Oct 2024 |
|---|---|
| Original language | English |
| Awarding Institution |
|
| Supervisor | Diego Vazquez-Brust (Supervisor) & Natalia Yakovleva (Supervisor) |