Sustainable Shifts in Finance: How Green Policies Influence the Adoption of Green ICT in the Banking Sector

Abstract

The banking industry is increasingly expected to harmonize financial intermediation with sustainability and digital transformation goals. To improve operational capabilities, reduce environmental impacts, and comply with Environmental, Social, and Governance (ESG) regulations, Tanzanian banks are gradually deploying environmentally sustainable banking practices and information and communication technology (ICT) systems. This study evaluated the moderating effect of green policies while examining the impacts of social, environmental, and economic sustainability on green banking operations and green ICT uptake. The study was guided by the Triple Bottom Line (TBL) paradigm. Partial Least Squares Structural Equation Modelling (PLS-SEM) was used to analyse data collected from commercial banks. The results showed that green banking operations strongly encourage the adoption of green ICT (β = 0.438, p = 0.000), while social sustainability (β = 0.067, p = 0.000), economic sustainability (β = 0.562, p = 0.000), and environmental sustainability (β = 0.105, p = 0.000) have substantial impacts on green banking operations. Additionally, green policies favourably moderate the relationships of social sustainability (β = 0.159, p = 0.001) and environmental sustainability (β = 0.165, p = 0.000) with green banking operations. Green policies also have considerable impacts on green banking operations (β = 0.302, p = 0.000) and green ICT uptake (β = 0.295, p = 0.001). The study informs policymakers and banking institutions in emerging economies about the benefits of promoting ecologically conscious banking practices and investing in green technology. Our study contributes by integrating sustainability aspects, green policies, green banking practices, and green ICT adoption into a single model.