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Environmental Sustainability and Climate Change: An Emerging Concern in Banking Sectors

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  • Abdulazeez Y. H. Saif-Alyousfi

    (Financial Management Program, Department of Business Administration, College of Business Administration, University of Hafr Al-Batin, Hafr Al-Batin 39524, Saudi Arabia)

  • Turki Rashed Alshammari

    (Financial Management Program, Department of Business Administration, College of Business Administration, University of Hafr Al-Batin, Hafr Al-Batin 39524, Saudi Arabia)

Abstract

This study explores the crucial role of the banking industry in addressing climate change and promoting environmental sustainability. As climate change increasingly threatens global economies, ecosystems, and public health, financial experts recognize the potential for the banking sector to contribute to a low-carbon economy. By incorporating green-banking practices, which blend traditional financial services with environmental, social, and economic considerations, banks can foster sustainable development while reaping financial benefits. The research examines the dynamics of sustainable banking, focusing on its ability to drive efficiency improvements through eco-friendly programs and enhance profitability. Furthermore, the study discusses the challenges in adopting and implementing environmental sustainability, comparing the command-and-control regulatory model with voluntary approaches. The findings emphasize the importance of effective regulation and incentives for ensuring that banks adopt sustainable practices, ultimately contributing to a more resilient and low-carbon economic system. Through this analysis, this study underscores the banking industry′s pivotal role in shaping the transition towards a sustainable future.

Suggested Citation

  • Abdulazeez Y. H. Saif-Alyousfi & Turki Rashed Alshammari, 2025. "Environmental Sustainability and Climate Change: An Emerging Concern in Banking Sectors," Sustainability, MDPI, vol. 17(3), pages 1-20, January.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:3:p:1040-:d:1578416
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