Table 6 Overview of terminologies used in the literature on sustainable banking
No. | Author | Year | Definition |
|---|---|---|---|
1 | (Jeucken & Bouma, 1999, S. 28) | 1999 | Sustainable banking involves the integration of two key manifestations: socially and environmentally responsible initiatives and integration of environmental and social considerations into business strategies and product design. Incorporating environmental criteria into investments and lending may involve price differentials for customers. |
2 | (Bouma et al., 2001) | 2001 | Sustainable banking provides financial capital and risk management that is provided to products, projects and organizations that promote (or at least do not harm) economic prosperity, social equity and environmental protection. |
3 | (Alsina, 2002) | 2002 | Ethical banks are those that seek to finance profitable economic activities that also have a positive social impact. Ethical banking is part of the solidarity enterprise movement. |
4 | (Sasia & De la Cruz, 2008) | 2008 | Ethical banks consist of a heterogeneous group of banking institutions that specialize in financing the most disadvantaged groups, social economy enterprises, non-governmental organizations and companies that behave responsibly towards their human, social and natural environment. |
5 | (Earhart et al., 2009, S. 4–5) | 2009 | Sustainable banks have implemented policies and practices that reflect corporate social responsibility (CSR) and have incorporated environmental, social and governance (ESG) principles into their regular business operations. Profitability comes from focusing on explicitly sustainable businesses that provide social, environmental and cultural benefits and enable true economic growth by financing only those businesses and projects that serve sustainability. |
6 | (Jeucken, 2001) | 2001 | Sustainable banks are those that offer sustainable products to their customers and promote socially responsible investments. They are assessed by stakeholders based on economic and social performance. Green financial institutions refer to the financial institutions whose external and internal operations, − strategic goals, day-to-day activities, products and services, investment policies, and risk management – the process of decision-making and selection process of stakeholders show respect to the components and the environment, and the society’s interests. |
7 | (GABV, 2012) | 2012 | Sustainable banks deliver products, services and social, environmental and financial returns to support the real economy. They have decades of experience and can demonstrate a consistent commitment to productive economic activity. |
8 | (Polonskaya & Babenko, 2012) | 2012 | Sustainable banking provides an opportunity for the creation of innovative products and services that brings positive social and environmental advantages, such as renewable and more efficient energy, cleaner production processes and technologies, microfinance, biodiversity conservation, provision of financial services for marginalised groups (such as for youths and women), low-income housing, and agency banking. |
9 | (Singh & Singh, 2012) | 2012 | Green banking is when normal banking operations take into account additional social and environmental factors to ensure environmental sustainability and proper use of natural resources. |
10 | (Salzmann, 2013, S. 11) | 2013 | A sustainable bank – also known as ethical, social, alternative, or civic bank – attends to the social and environmental effects of its investments and loans. |
11 | (Bundesverband deutscher Banken e.V, 2014, S. 7) | 2014 | Sustainable banks are economically successful in the long term and at the same time act ecologically and socially. |
12 | (Rebai, 2014) | 2014 | Sustainable banking is defined as “a trustworthy banking system that takes into account all internal and external stakeholders, taking into account financial and non-financial factors. It ensures an intermediation activity that takes into account, in particular, social and environmental aspects with short, medium and long term time horizons. It creates ethical values and contributes to the stability and soundness of the financial system by appropriately managing various risks and striving for a continuous and optimal balance between the interests of its stakeholders. |
13 | (Stankeviciene & Nikonorova, 2014) | 2014 | Sustainable banking can be seen as a value system that ensures that banks’ business is not only beneficial to their employees and shareholders, but also to customers and the economy as a whole. In addition, through concrete action, harmful effects on society and the environment are avoided or reduced to a minimum. |
14 | (Bouma et al., 2017) | 2017 | Sustainable banking can be defined as that which provides financial capital and risk management for projects and institutions that promote environmental protection, economic progress and social justice. It is about letting the bank’s strategy, projects, operations, products, and services be guided by the principles of sustainability to achieve positive social, environmental, and economic impacts to promote sustainable development. For example, innovative products and services that promote financial inclusion by targeting specific groups (e.g., women, the poor, etc.), support education financing, or encourage the purchase of environmentally friendly products (e.g., green credit cards) can significantly accelerate the achievement of the SDGs. |
15 | (Bouma et al., 2017) | 2017 | Sustainable banking includes the areas, environmental policies of banks, the importance of transparency and communication between banks and their stakeholders, and the key role of governments, non-governmental organizations and multilateral banks in achieving sustainability. The concept of sustainability is divided into three key factors: environmental, social and governance. |
16 | (Deloitte, 2017, S. 4–5) | 2017 | Sustainable banking is the integration of environmental, social and governance (ESG) into traditional banking operations. As of today, it is assumed that the operational and business activities of banks are carried out with conscious consideration of environmental and social impacts. Banking institutions implement sustainable banking both in their internal day-to-day operations (in terms of how they manage their physical branches/locations, human capital, costs, opportunities and risks) and in their activities related to external interactions with their customers and the projects they finance. |
17 | (Pathak & Tewari, 2017, S. 110–111) | 2017 | Through the support of governments around the world, banks have begun to play a prominent positive role in the process of sustainable development. Through innovative and more sustainable financial products, on the one hand, their own business activities are made more environmentally friendly, and on the other hand, financial flows are managed in the sense of positive impact finance. As a result, through their actions, banks have the opportunity to reduce income inequality, increase savings rates, boost farmers’ yields and alleviate hunger among the population. Banks can also contribute to gender equality and access to clean water. |
18 | (Raut et al., 2017, S. 551) | 2017 | A trustworthy banking system accounting for all its internal and external stakeholders considering financial and non-financial factors. It ensures intermediation activities that care in particular about social and environmental aspects with short, medium and long-term horizons. It establishes ethical values and contributes to the stability and soundness of the financial system by adequately managing various risks as well as seeking continuous and optimal trade-off among its stakeholders’ interests. |
19 | (Bose et al., 2018) | 2018 | “Green banking” includes implementing, supporting and promoting environmentally friendly practices and reducing the carbon footprint in banks’ internal and external activities. |
20 | (Shamshad et al., 2018) | 2018 | Sustainability in banks describes three spheres - environmental, economic and social. Accordingly, environmental sustainability involves the bank restructuring its activities to promote environmental friendliness by minimizing water consumption, using less paper, using renewable energy, and ensuring that lending is only done to support environmentally friendly projects, such as investing in green funds, green bonds, etc. Economic sustainability addresses the aspects of a bank’s operations and support of the economy. This includes corporate philanthropy, consideration of sustainability parameters, clarity of banking operations, governance and standards, and making economically viable investments. |
21 | (Climent, 2018, S. 4) | 2018 | Sustainable banking is an alternative form of banking in which ecological, sustainable, ethical and social values are central components of the business strategy. By ethical banking, he means banking institutions that specialize in financing the most disadvantaged groups, social economy enterprises, non-governmental organizations and companies that behave responsibly towards their human, social and natural environment. Furthermore, they strive to finance profitable economic activities that also have a positive social impact. |
22 | (San-Jose et al., 2018) | 2018 | The sustainability of banks can be described as the ability to balance their own development and contribution to society with available resources. Dapei economic efficiency reflects the ability of banks to use available resources to generate profits. |
23 | (Zhixia et al., 2018, S. 573) | 2018 | Green banking is a form of banking activity where the banks take initiative to do its daily activates as a conscious being in the society by considering in-house and external environmental sustainability. The banks who do such type of banking activities is termed as socially responsible and a sustainable bank or green bank or ethical bank. Such type of banking is not only limited its in-house green activities rather it helps to make the environment green and viable through facilitating green financing. |
24 | (Costa-Climent & Martinez-Climent, 2018, S. 6) | 2018 | A sustainable bank promotes stakeholder sustainability in its internal and external activities. It does this by using environmental, social or cultural concerns when selecting ethical investments and by supporting community improvement activities. This requires a view of the environment, the company’s purpose, and its desired role in society. In doing so, sustainable banks accept lower profit margins and take more risks, provided the activities undertaken are worthwhile from a sustainable perspective. |
25 | (Costa-Climent & Martinez-Climent, 2018, S. 6) | 2018 | Sustainable banks have a willingness to forgo maximizing margins and are generally willing to take higher risks to promote certain activities. In doing so, they apply risk-independent premium differentiation - which is not applied in the current system because the risk is too high and the earnings too low. |
26 | (Yip & Bocken, 2018, S. 150) | 2018 | Sustainable banking is defined as the delivery of “financial products and services, which are developed to meet the needs of people and safeguard the environment while generating profit. |
27 | (Bayer et al., 2019, S. 659) | 2019 | An ethical bank explicitly promotes socially responsible investment strategies, for example, by excluding specific harmful industries such as the arms, gambling, pornography, tobacco, alcohol, and nuclear energy industries, as well as firms that violate labor legislation or human rights, contribute to environmental pollution or destruction, or are involved in corruption. |
28 | (Kumar & Prakash, 2019) | 2019 | Sustainable banking implies carrying out banking business by incorporating environmental social and ethical considerations into business strategy and promoting sustainable development. “Sustainability in banking can be adopted by banks in two ways; first through the adoption of environmental and social responsibility in a bank’s day to day operations by undertaking environmental consideration initiatives (i.e. zero waste, paperless banking, energy efficiency techniques, etc.) and social development initiatives (e.g. financial inclusion efforts, financial literacy, community welfare programme, etc.). Second, by incorporating environmental and social considerations into the bank’s core strategy (i.e. environmental and social impact criteria into financing activities, development of sustainable financial products, etc.). |
29 | (Kumar & Prakash, 2019, S. 4) | 2019 | Sustainable banking means incorporating environmental, social and ethical considerations into business strategy when conducting banking operations and promoting sustainable development. |
30 | (Bayer et al., 2019) | 2019 | Unlike conventional banks, social banks conduct their business with the aim of creating positive social, environmental or sustainable benefits.” This includes incorporating moral principles into the overall business strategy and creating a corporate culture in which investments, customers and employees are treated ethically and with care. |
31 | (European Comission, 2020) | 2020 | In the EU’s policy context, sustainable finance is understood as finance to support economic growth while reducing pressures on the environment and taking into account social and governance aspects. Sustainable finance also encompasses transparency when it comes to risks related to ESG factors that may have an impact on the financial system, and the mitigation of such risks through the appropriate governance of financial and corporate actors. |
32 | (Nwagwu, 2020, S. 4) | 2020 | Sustainable banking combines profit maximization with social and environmental concerns in business operations, credit risk management, and investment decisions to create positive value for society. It is based on the principles of responsible business practices, shared value, and the triple bottom line of environmental, social, and governance (ESG) to address negative footprints and contribute to the transformation of society while remaining profitable. |
33 | (Nwagwu, 2020, S. 5) | 2020 | Sustainability in the banking sector can be said to mean the overall development of environment, economy and society with the help of innovative methods such as green finance, green credits, less paper consumption, green service counters, unique financial inclusion products and services, education and health care packages for the poor, etc. |
34 | (Tan & Tsionas, 2020, S. 4) | 2020 | Sustainability at banks describes the ability to strike a balance between their own development and contribution to society with the available resources. |
35 | (Tan & Tsionas, 2020, S. 2) | 2020 | In the banking sector specifically, we argue that sustainability development mainly concerns the issue of selfdevelopment, as well as contributing to the development of social welfare. Self-development mainly involves performance and stability. Therefore, less volatility of non-performing loans ratios will contribute to the selfdevelopment of banks and further improve sustainability development. |
36 | (Xu, 2020) | 2020 | Sustainable banking provides financial products and services that allow incorporating the poorest people into the financial market. Sustainable banking also generates trust, necessary for developing financial markets. Both elements improve financial inclusion, which increases financial development, especially in developing countries. |
37 | (Da Silva Inácio & Delai, 2021) | 2021 | Sustainable finance is the inclusion of short-, medium- and long-term environmental, social and governance issues in project financing products, services and practices of any financial organisation. |
38 | (Da Silva Inácio & Delai, 2021, S. 18) | 2021 | A sustainable bank can generate several positive impacts, both in the economic, social and environmental spheres. The main impacts that can be cited are contribution to economic development, poverty reduction, financial inclusion, promotion of social well-being and prevention of environmental risks through preservation. |
39 | (wbcsd, 2021, S. 51) | 2021 | Sustainable finance is when all capital and financial products and services are mobilized in a way that helps support sustainable development |
40 | (Da Silva Inácio & Delai, 2021, S. 10) | 2021 | We propose that a sustainable bank is a bank that offers products, services and practices that contribute to sustainable development, benefiting the environmental, social and economic dimensions in the short, medium and long term. |
41 | (Venanzi & Matteucci, 2021, S. 2) | 2021 | As an expanded and operationalized sustainability concept, sustainable banking is defined as incorporating lending in green/ethical sectors but also on other broader attributes such as, Ensuring financial stability, reducing systemic risk, supporting the real economy, reduction of business risk, accurate and rigorous assessment of the creditworthiness of borrowers, Long-term horizon in strategies/policies, ensure best practices in corporate governance and incorporating ESG risks into their risk management systems. |