IDEAS home Printed from https://ideas.repec.org/a/sae/sagope/v14y2024i3p21582440241271232.html
   My bibliography  Save this article

Developing a Sustainable Finance Index and Its Implications on Inter-Intra Banking Sector

Author

Listed:
  • Muhammad Shaukat Malik
  • Muhammad Irfan
  • Samavia Munir

Abstract

In the contemporary landscape of corporate governance, where organizations are increasingly recognizing the importance of not only generating profits but also contributing to societal progress and environmental preservation, there arises a pressing requirement for a comprehensive financial index that accurately captures these multifaceted commitments. In this study, we introduce a novel sustainable finance index that utilizes the Grey Relational Analysis (GRA) method to comprehensively capture the three fundamental dimensions of sustainability: economic, social, and environmental aspects. The GRA methodology ensures a comprehensive and balanced consideration of each dimension, thereby providing a holistic perspective. The deployment of this index, which encompasses a wide range of criteria, on an extensive 11-year financial dataset (2010–2021) obtained from 21 prominent commercial banks, reveals fascinating and thought-provoking findings. Banks frequently demonstrate intermittent commitments, wherein their pursuit of short-term gains often takes precedence over the imperative of economic sustainability. While some banks have been notable champions of social endeavors, it is concerning to observe that environmental sustainability has unfortunately taken a backseat in the overall banking landscape. This index provides a meticulous assessment of sustainable financial paradigms, ensuring accuracy and reliability. It serves as a valuable resource, enhancing the quality of research and providing corporations with a sophisticated framework to evaluate and enhance their sustainable financial paths.

Suggested Citation

  • Muhammad Shaukat Malik & Muhammad Irfan & Samavia Munir, 2024. "Developing a Sustainable Finance Index and Its Implications on Inter-Intra Banking Sector," SAGE Open, , vol. 14(3), pages 21582440241, August.
    • Handle: RePEc:sae:sagope:v:14:y:2024:i:3:p:21582440241271232
    DOI: 10.1177/21582440241271232
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/21582440241271232
    Download Restriction: no
    File URL: https://libkey.io/10.1177/21582440241271232?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dimmelmeier, Andreas, 2021. "Sustainable Finance as a Contested Concept: Tracing the Evolution of Five Frames Between 1998 and 2018," SocArXiv 7jhgp, Center for Open Science.
    2. Marco Bertoni, 2019. "Multi-Criteria Decision Making for Sustainability and Value Assessment in Early PSS Design," Sustainability, MDPI, vol. 11(7), pages 1-27, April.
    3. Nhemachena, Charles & Matchaya, Greenwell & Nhemachena, C. R. & Karuaihe, S. & Muchara, B. & Nhlengethwa, Sibusiso, 2018. "Measuring baseline agriculture-related sustainable development goals index for southern Africa," Papers published in Journals (Open Access), International Water Management Institute, pages 10(3):1-16..
    4. Dikau, Simon & Volz, Ulrich, 2021. "Central bank mandates, sustainability objectives and the promotion of green finance," Ecological Economics, Elsevier, vol. 184(C).
    5. Hsu, Bo-Xiang & Chen, Yi-Min, 2023. "The relationship between corporate social responsibility, external orientation, and environmental performance," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    6. Kim Schumacher & Hugues Chenet & Ulrich Volz, 2020. "Sustainable finance in Japan," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 10(2), pages 213-246, April.
    7. Feng, Cheng-Min & Wang, Rong-Tsu, 2000. "Performance evaluation for airlines including the consideration of financial ratios," Journal of Air Transport Management, Elsevier, vol. 6(3), pages 133-142.
    8. Aziz Durrani & Masyitah Rosmin & Ulrich Volz, 2020. "The role of central banks in scaling up sustainable finance – what do monetary authorities in the Asia-Pacific region think?," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 10(2), pages 92-112, April.
    9. Mark Anthony Camilleri, 2020. "The market for socially responsible investing: a review of the developments," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 17(3), pages 412-428, April.
    10. Marco Migliorelli, 2021. "What Do We Mean by Sustainable Finance? Assessing Existing Frameworks and Policy Risks," Sustainability, MDPI, vol. 13(2), pages 1-17, January.
    11. Matthew Haigh, 2012. "Publishing and defining sustainable finance and investment," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 2(2), pages 88-94, April.
    12. Pedro Soto-Acosta & Diana-Maria Cismaru & Elena-Mădălina Vătămănescu & Raluca Silvia Ciochină, 2016. "Sustainable Entrepreneurship in SMEs: A Business Performance Perspective," Sustainability, MDPI, vol. 8(4), pages 1-12, April.
    13. Jeffrey D. Sachs & Guido Schmidt-Traub & Mariana Mazzucato & Dirk Messner & Nebojsa Nakicenovic & Johan Rockström, 2019. "Six Transformations to achieve the Sustainable Development Goals," Nature Sustainability, Nature, vol. 2(9), pages 805-814, September.
    14. Marco Migliorelli, 2021. "What Do We Mean by Sustainable Finance? Assessing Existing Frameworks and Policy Risks," Post-Print hal-03476960, HAL.
    15. Mark Anthony Camilleri, 2019. "The circular economy's closed loop and product service systems for sustainable development: A review and appraisal," Sustainable Development, John Wiley & Sons, Ltd., vol. 27(3), pages 530-536, May.
    16. Mark Anthony Camilleri, 2017. "Corporate Sustainability, Social Responsibility and Environmental Management," Springer Books, Springer, number 978-3-319-46849-5, March.
    17. Alessio Maria Braccini & Emanuele Gabriel Margherita, 2018. "Exploring Organizational Sustainability of Industry 4.0 under the Triple Bottom Line: The Case of a Manufacturing Company," Sustainability, MDPI, vol. 11(1), pages 1-17, December.
    18. Gaurav Jyoti & Ashu Khanna, 2021. "Does sustainability performance impact financial performance? Evidence from Indian service sector firms," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(6), pages 1086-1095, November.
    19. Samira El Gibari & Trinidad Gómez & Francisco Ruiz, 2019. "Building composite indicators using multicriteria methods: a review," Journal of Business Economics, Springer, vol. 89(1), pages 1-24, February.
    20. Ana Tur-Porcar & Norat Roig-Tierno & Anna Llorca Mestre, 2018. "Factors Affecting Entrepreneurship and Business Sustainability," Sustainability, MDPI, vol. 10(2), pages 1-12, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Koray Altintas & Ozalp Vayvay & Sinan Apak & Emine Cobanoglu, 2020. "An Extended GRA Method Integrated with Fuzzy AHP to Construct a Multidimensional Index for Ranking Overall Energy Sustainability Performances," Sustainability, MDPI, vol. 12(4), pages 1-21, February.
    2. Aghilasse Kashi & Mohamed Eskandar Shah, 2023. "Bibliometric Review on Sustainable Finance," Sustainability, MDPI, vol. 15(9), pages 1-30, April.
    3. Naz, Farah & Tanveer, Arifa & Karim, Sitara & Dowling, Michael, 2024. "The decoupling dilemma: Examining economic growth and carbon emissions in emerging economic blocs," Energy Economics, Elsevier, vol. 138(C).
    4. Eirini Triantafyllidou & Anastasia Zabaniotou, 2022. "From Theory to Praxis: ‘Go Sustainable Living’ Survey for Exploring Individuals Consciousness Level of Decision-Making and Action-Taking in Daily Life Towards a Green Citizenship," Circular Economy and Sustainability, Springer, vol. 2(1), pages 113-139, March.
    5. Phoebe Koundouri & Conrad Landis & Konstantinos Dellis & Angelos Plataniotis, 2025. "Integrating Sustainable Development Goals in Environmental, Social and Governance Criteria and the Sustainability Transformation of the EU Business Sector," DEOS Working Papers 2526, Athens University of Economics and Business.
    6. Mertzanis, Charilaos, 2024. "Central bank policies and green bond issuance on a global scale," Energy Economics, Elsevier, vol. 133(C).
    7. Ozili Peterson. K., 2021. "Making Sustainble Finance Sustainable," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 17(3), pages 64-70, September.
    8. Daniela Kletzan-Slamanig & Angela Köppl, 2021. "The Evolution of the Green Finance Agenda – Institutional Anchoring and a Survey-based Assessment for Austria," WIFO Working Papers 640, WIFO.
    9. Flögel Franz & Schepelmann Philipp & Zademach Hans-Martin & Zörner Michael, 2024. "Injecting climate finance into SME lending in Germany: Opportunities for and limitations of regional savings and cooperative banks," ZFW – Advances in Economic Geography, De Gruyter, vol. 68(2), pages 111-123.
    10. María Jesús Segovia‐Vargas & I. Marta Miranda‐García & Freddy Alejandro Oquendo‐Torres, 2023. "Sustainable finance: The role of savings and credit cooperatives in Ecuador," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 951-980, September.
    11. Iqbal, Najaf & Naeem, Muhammad Abubakr & Suleman, Muhammed Tahir, 2022. "Quantifying the asymmetric spillovers in sustainable investments," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 77(C).
    12. Gimede Gigante & Emiliano Sironi & Caterina Tridenti, 2023. "At the Frontier of Sustainable Finance: Impact Investing and the Financial Tradeoff; Evidence from Private Portfolio Companies in the United Kingdom," Sustainability, MDPI, vol. 15(5), pages 1-21, February.
    13. Jaweria Yameen & Ploypailin Kijkasiwat & Anwar Hussain & Muhammad Azhar Farooq & Tahira Ajmal, 2024. "Green finance in banking industry: a systematic literature review," SN Business & Economics, Springer, vol. 4(8), pages 1-28, August.
    14. Gabija Simaite & Greta Keliuotyte-Staniuleniene, 2023. "Financial sustainability and derivatives: a theoretical approach," Technium Social Sciences Journal, Technium Science, vol. 39(1), pages 370-376, January.
    15. repec:ers:journl:v:xxiv:y:2021:i:3b:p:152-164 is not listed on IDEAS
    16. Jorge Luis García & Ignacio de los Ríos, 2021. "Model to Develop Skills in Accounting Students for a 4.0 Industry and 2030 Agenda: From an International Perspective," Sustainability, MDPI, vol. 13(17), pages 1-31, August.
    17. Christoph Nedopil & Truzaar Dordi & Olaf Weber, 2021. "The Nature of Global Green Finance Standards—Evolution, Differences, and Three Models," Sustainability, MDPI, vol. 13(7), pages 1-23, March.
    18. Ghaemi Asl, Mahdi & Ben Jabeur, Sami & Ben Zaied, Younes, 2024. "Analyzing the interplay between eco-friendly and Islamic digital currencies and green investments," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    19. Shadrach Baa-Naa Kundi & Philip Attuquayefio, 2025. "Assessing the Nexus between Climate Finance and State Vulnerability in Africa," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(1), pages 1816-1840, January.
    20. Samridhi Kapoor & Manoj Govind Kharat & Shreyanshu Parhi & Mukesh Govind Kharat & Shatrudhan Pandey, 2024. "Striving for Business Sustainability: Understanding the Interplay and Impact of Sustainable Finance, Environmental Social Governance Strategy, and Information Technology Integration on Sustainable Ent," Circular Economy and Sustainability, Springer, vol. 4(4), pages 2749-2774, December.
    21. Xiang-li Lim & Vatcharin Sirimaneetham, 2021. "Securing green development: Can Asia-Pacific central banks and financial supervisory authorities do more?," Asia-Pacific Sustainable Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 28(2), pages 69-111, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:sagope:v:14:y:2024:i:3:p:21582440241271232. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.