Linking green finance to sustainability performance: the mediating role of CSR and the moderating effect of stakeholder pressures

Purpose

This study aims to examine the relationships among green finance, corporate social responsibility (CSR) initiatives, stakeholder pressures and sustainability performance in the banking sector of an emerging economy. Specifically, it investigates the mediating role of CSR in the green finance–sustainability performance link and the moderating effect of stakeholder pressures on the CSR–sustainability performance relationship.

Design/methodology/approach

Adopting a non-experimental research design, this study employs covariance-based structural equation modeling (CB-SEM) to analyze survey data from 161 financial managers to assess the impact of green finance, CSR and stakeholder pressures on sustainability outcomes.

Findings

Green finance significantly enhances sustainability performance by supporting environmentally friendly investments. CSR mediates this relationship by converting green financial efforts into tangible sustainability improvements. Stakeholder pressures moderate the CSR–sustainability link, ensuring that CSR practices are genuine and effective. These findings support stakeholder and legitimacy theories, highlighting the strategic importance of CSR and stakeholder engagement.

Originality/value

This study advances our understanding of how green finance, CSR, and stakeholder pressures jointly drive sustainability performance in emerging market banks. It provides practical guidance for managers to align financial services with sustainability goals by adopting specific initiatives, such as offering green bonds, sustainability-linked loans, financing renewable energy projects and implementing CSR programs focused on environmental education, community development and transparent reporting. These strategies help to mitigate environmental risks, meet stakeholder expectations and strengthen long-term competitiveness.