Green Banking Disclosure: The Antecedents and It’s Consequences

This study investigates the antecedents and consequences of green banking disclosure. Based on agency theory, legitimacy theory, and resource based theory and the result of previous studies, ten hypotheses were formulated to explain the green banking phenomenon. To test the hypotheses, the current researchers documented secondary data on corporate governance, firm-specific, green banking, profitability, and reputation. Using the purposive sampling method, 30 commercial banks registered by the Indonesian Financial Service Authority were chosen as the final sample, resulting in 150 firm-year data that could be analyzed. Structural Equation Modelling-Partial Least Square, including bootstrapping, was used to analyze the data. The analysis shows that green banking practices benefit banks by enhancing their profitability and reputation. The impact of green banking disclosure on the possible benefit is significantly higher in conventional banks than in Islamic banks. Nevertheless, those variables do not show such an association for Islamic bank. This study provides new insight into the practice of green banking disclosure in Indonesia. It does so by comparing the disclosure made by conventional and Islamic banks in Indonesia, what factors determine the disclosure and what benefits the bank can get by disclosing their green banking initiatives.