If environmental degradation and global warming are not adequately handled, rising sea levels, warmer oceans, and melting glaciers may become more common or extreme. Every stage of the value chain in the lifecycle of a product or service, including extraction, processing, manufacturing, consumption, and waste disposal, contributes to climate change. These activities imposed physical and transition risks that can negatively affect businesses, the environment, and the overall economy. As the banks see climate change could affect their clients and financial outlook, the adoption of green banking is necessary to ensure that they integrate climate risk analysis when deciding to finance or invest in activities that potentially harm the environment. This paper intends to conceptualise the notion of green banking, which has gained traction in both industrialised and developing countries over the last few decades. The study focuses on the risk of climate change, as well as present practices of the adoption of green banking. The qualitative study utilises the descriptive approach and analysis based on a review of previous literature. The findings of this study are beneficial for banks who want to implement or have already implemented green banking, as a better understanding of green banking will improve the banks' reputation, accountability, and profitability.
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In-Text Citation: (Rahman & Mohamad, 2022)
To Cite this Article: Rahman, L. A., & Mohamad, M. (2022). Climate Change Risk: The Need for Green Banking. International Journal of Academic Research in Business and Social Sciences, 12(12), 1109– 1116.
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