GREEN FINANCE AND PRACTICES OF MALAYSIAN BANKS, THEIR ENVIRONMENTAL IMPLICATIONS AND CHALLENGES

Abstract

This research delves into green finance and green banking practices, an area well-known within academia and the financial industry. However, there is still much to uncover, especially the environmental impacts they bring. Although various studies have been conducted on these topics, their scopes vary, and their findings are mixed. Due to limited data availability, this study extracted information on green finance and green practices through climate related disclosure from reports of four selected Malaysian banks and relevant environmental data from respective websites. Using the data 
collected for 2017-2022, green finance, green practices and environmental data were descriptively analyzed. Pooled Ordinary Least Squares (OLS) regression was used to examine four dependent variables and determine the implications of green finance (total proceed of green finance) and green 
practices (total logarithm of greenhouse gas emissions by banks) on the environment. The study's findings indicated significant effects of green finance by the Malaysian banks on the environment. Moreover, the study identified two potential challenges that could impede Malaysian banks' implementation of green finance. This underscores the importance of future studies on green finance to address these challenges and utilize larger sample sizes, incorporating both quantitative and qualitative data on green finance.