Internal organisational value systems, green banking practices and firm performance: empirical evidence from banks

Abstract

Purpose Value systems and their effect on organisational practices are an important topic of on-going research. Particularly in the context of environmental crisis, the role of alternative internal values and their impacts becomes increasingly important. The current study aims to gain insight into how organisational value systems shape organisational practices (specifically, green banking disclosure practices) and, in turn, impact firm performance. Design/methodology/approach Our study presents an analysis of seven years of data sourced from banks (secular and religious) in Bangladesh that disclose green banking information. This data is supplemented by qualitative evidence from 11 semi-structured interviews with bank managers to obtain a more in-depth understanding of the phenomenon. Findings Our findings indicate that banks' alternative value systems positively affect their green disclosure practices. Further, our findings indicate that while environmental disclosure has a positive effect on banks' overall firm value, this positive effect is further positively moderated by their alternative value systems. Our interview data confirms that banks with alternative value systems adopt many green activities beyond regulatory compliance, motivated, as indicated by respondents, to protect and care for the natural environment as reflections of firms' internal value systems. Research limitations/implications The study establishes that internal value systems of banks that have penetrated deeply into the internal operational philosophy are strategically important to ensuring green reporting contributes to improved market value. Originality/value The effect of organizational values on other aspects of firm performance and evaluation is not well understood. The study aims to investigate and provide new information on this phenomenon in emerging economies, and particularly where these values align with greater global concerns such as green values. By providing a focus on non-performing loans, it provides new insights using religious and secular banks as comparators. As such, this research provides original insights into the role of values in the implementation and operationalization of those values.