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Systematic Review

Green Banking Practices, Opportunities, and Challenges for Banks: A Systematic Review

by
Martin Kamau Muchiri
1,*,
Szilvia Kesmarki Erdei-Gally
2 and
Maria Fekete-Farkas
3
1
Doctoral School of Economics and Regional Sciences, Hungarian University of Agriculture and Life Sciences, Páter Károly u. 1., 2100 Gödöllő, Hungary
2
Institute of Technology, Hungarian University of Agriculture and Life Sciences, Páter Károly u. 1., 2100 Gödöllo, Hungary
3
Institute of Agricultural and Food Economics, Hungarian University of Agriculture and Life Sciences, Páter Károly u. 1., 2100 Gödöllő, Hungary
*
Author to whom correspondence should be addressed.
Climate 2025, 13(5), 102; https://doi.org/10.3390/cli13050102
Submission received: 27 March 2025 / Revised: 7 May 2025 / Accepted: 9 May 2025 / Published: 14 May 2025
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Abstract

:
Green banking has become a concept of interest, particularly with the focus on the role played by banks in pursuing Sustainable Development Goal 13 on climate action. This study is distinguished from previous ones in that it aimed at investigating the multi-regional view on green banking practices/activities around the world with a special emphasis on the opportunities and challenges that various banks encounter in different geographical areas. A systematic review approach was adopted based on the Web of Science and Scopus databases, in which 159 articles were retrieved and 62 articles synthesized through a thematic analysis. The research process was demonstrated through a Prisma 2020 flowchart. Key multiregional green banking activities identified include digital banking, green loan or sukuk products for Islam-dominated economies, green services and investments, and financing of green infrastructure. In essence, the implementation of green banking is either directly through active green lending and greening their operations or indirectly through enhancing conditions. The key challenges identified include regulatory handles, social economic and culture hinderances, transition risk and the high cost of compliance, greenwashing concerns, and weak investor confidence. The most prevalent opportunities included green banking as a strategic competitive advantage, emerging market niche, and as a strategy for long-term climate risk management.

1. Introduction

In the recent past, much emphasis has been placed on the role that banking contributes to attaining sustainable development as well as how banks react to the prolonged problem of climate risk. Sustainability and economic development is one of the most explored topics in recent years [1,2]. Green banking, which involves integrating environmental factors into banking management and operations, has attracted great research interest [2]. The concept was first adopted by Western countries in 2003 with a focus on conserving the environment [1]. It was used interchangeably with sustainable or ethical banking [3]. It is also regarded as an extension of what used to be known as digital banking. While digital banking refers to how banks apply the Internet to improve the clients’ experience, green banking goes beyond and incorporates the aspects of sustainability in business by avoiding adverse effects on the environment [4]. Green banking is not only limited to digital banking but also focuses on supporting sustainable economic activities and operations that reduce adverse environmental effects. On the other hand, digital banking revolves around how banks leverage the Internet to improve their clients’ experience [5].
The banking sector is generally regarded as a non-polluting industry; however, banks play a crucial role either directly or indirectly in influencing the carbon footprint that goes to the environment. Thus, banks can affect the ecological footprint as they are the primary source of credit and funding to businesses, governments, and individuals [6] Green banking is vital in reducing adverse ecological effects as envisaged in Sustainable Development Goal 13 on climate action. When banking activities are environmentally conscious, banks play a significant role in mitigating the adverse effects of climate change by promoting projects that promote climate action and contribute significantly to achieving UN Sustainable Development Goal 13 [7]. The green banking concept also challenges banks to develop environmentally friendly policies, such as reducing carbon emissions, supporting green transitions, and waste management policies and practices [8]. Such initiatives are motivated by various factors, including social and legal pressures and the possibility of opportunities that motivate banks to contribute to reducing environmental pollution [9,10].
Although prior studies focused on different aspects of green banking, the previous literature review is confined to specific regions only, which hinders the generalization of the findings for formulating the global comprehensive strategies for the banks. This research seeks to fill this gap by undertaking a comprehensive systematic review to identify the most prevalent green banking practices undertaken by banks across the globe, focusing on opportunities and challenges related to green financing initiatives that banks face across the globe. In bridging this gap, this study seeks to pursue the following three research questions:
RQ1:
What are the most prevalent green banking practices banks are engaged in in response to the global challenge of climate change?
RQ2:
What are the most prevalent challenges banks encounter while implementing green banking or financing initiatives across diverse geographical contexts?
RQ3:
What are the key green banking and financing opportunities available to commercial banks arising from climate change and how do these opportunities vary across regions?
Following the Introduction section, the paper is organized into the following chapters: Materials and Methods; Results; Discussion; Conclusions, Recommendations, and Limitations.

2. Materials and Methods

This study adopted the preferred reporting items for systematic review (PRISMA 2020) approach and checklist as developed by [11]. Prior to data extraction and analysis, the scoping review was not registered in a public registry however, all methodological procedures including the search strategy, inclusion and exclusion criteria and synthesis of data was clearly documented throughout the review process. The determination of the appropriate keywords applied in the search criteria was guided largely by the research objectives. Through heuristic trials, a combination of appropriate keywords was determined and applied to retrieve the relevant articles from two databases, i.e., Web of Science and Scopus. Scopus is widely used in social science and economics research due to its wide coverage and high-quality publications. The Web of Science database is characterized by a narrow scope but high-quality papers [12]. The following search queries were applied in each of the two databases:
Scopus:
TITLE-ABS-KEY ((“Green banking” OR “Sustainable banking” OR “Green finance” OR “Climate finance” OR “Environmental finance” OR “ESG banking” OR “Green lending” OR “Green investment”) AND (“Challenges” OR “Opportunities” OR “Barriers” OR “Risks” OR “Drivers” OR “Enablers” OR “Benefits”)) AND (LIMIT-TO (DOCTYPE, “ar”))
Web of Science:
TS = (“Green banking” OR “Sustainable banking” OR “Green finance” OR “Climate finance” OR “Environmental finance” OR “ESG banking” OR “Green lending” OR “Green investment”)
AND TS = (“Challenges” OR “Opportunities” OR “Barriers” OR “Risks” OR “Drivers” OR “Enablers” OR “Benefits”)
After running the search queries in the Web of Science and Scopus databases, a total of 159 articles were derived (Web of Science (51) and Scopus (108)). Database automatic filters were applied to help with the inclusion and exclusion criteria, which reduced the total number to 129 (WOS (40) and Scopus (89)). Table 1 below summarizes the inclusion and exclusion criteria adopted.
After applying the thorough inclusion and exclusion criteria, the two corpuses were merged and a total of 19 duplicates were removed, leaving a total of 110 articles eligible for manual accessibility. The merging and removal of duplicates was performed using a Python script, version 3.11. Articles were then assessed for relevance to at least one of the study objectives by critically examining the study topics, abstracts, and research findings. This was performed by all three researchers, and disagreements were solved through consultation and consensus. After the thorough review, 7 articles could not be retrieved, while 29 articles were found to be irrelevant to the study objectives or not based on the banking sector. The majority of the articles removed at this stage had some of the keywords highlighted in the search query, but the focus of their research was not in the banking sector, which was the main scope of this study. In the end, a total of 62 articles were considered relevant and were reviewed to derive insights pertaining to the 3 specific study objectives. The systematic process is summarized in the following Prisma flow chart (Figure 1) as guided by Page et al., template [11].

3. Results

This section presents the thematic analysis results for the three research objectives on the most prevalent green banking practices, opportunities, and challenges. The thematic analysis results are summarized in tables and graphs to make them easily readable. The results follow the order of the research objectives.

3.1. Most Prevalent Green Banking Activities

This section summarizes the research findings on the first study objective, which sought to identify the most prevalent green banking activities that banks engage in in response to climate change across the selected studies. After a thorough thematic analysis of the selected corpus, the following emerged as the main most prevalent green banking activities, as presented in Table 2 below.
As revealed in Figure 2 below, digital banking was identified as the most prevalent green banking activity, with a total of 46 appearances. This could be highly attributed to the major shift to paperless transactions among banking institutions, with the high adoption of digital and mobile banking enhancing both customer satisfaction and banking efficiency. The integration of Ai and blockchain-based sustainability apps for green financing tracking, digital reporting, and e-statements was also among the most prevalent specific digital banking activities highlighted. Green loans were identified as the second most prevalent green banking activity with 29 appearances. This study revealed that most of the green lending was directed to financing renewable energy project, financing the purchase of electric vehicles, green mortgages for energy-efficient homes, subsidized loans for green-transition-related investments and projects, and facilitating and supporting carbon credit trading transactions, among others.
The financing of green services emerged as the third most prevalent green banking activity with 25 appearances. Notable green services highlighted for banks included incorporating personal calculators on mobile apps to help customers calculate carbon emissions emanating from their lifestyle and providing rewards or cashbacks for environmentally positive behaviors, offering saving options linked to green investments and offering sustainability-linked investment portfolios among others.
Lastly, the synthesis indicated 15 appearances of banks investments in green infrastructure, particularly those that help them enhance their cost efficiency, optimize their resources, or enhance their environmental performance. Specific initiatives highlighted include investments in ATMs that are solar-powered, smart lighting, energy-efficient buildings, the installation of EV chargers in bank buildings, and investing in green data centers, among others.
Figure 2 below shows that digital banking is the most prevalent green banking activity and is highly driven by mobile platforms and innovations such as paperless transactions. Green loans and Sukuk follow, and are highly driven by eco-friendly investments and the financing of renewable energy. Green services are driven largely by banking innovations and offerings that help customers promote sustainable behavior. Green infrastructure is more inspired by energy efficiency initiatives such as green buildings and solar-powered ATMs among others. Figure 2 reveals a generally strong trend for digital and green-based financial products.

3.2. RQ2: Green Banking Challenges

This section presents the results of a thematic analysis focusing on the challenges facing or hindering the implementation of green banking and financing challenges across different geographical regions. The section reports the major thematic green banking challenges extracted from the selected corpus. The results also capture the frequency of occurrences for the extracted thematic challenges to understand the most prevalent ones and the regions where they are highly prevalent. The aim is to highlight the most important factors and identify regions where they are prevalent to create a basis for exploring the drivers for such prevalences. This approach presents a great opportunity to understand what challenges different banks are facing while reacting to the global challenge of climate change. Table 3 below summarizes the thematic analysis results, focusing on the most prevalent challenges of green banking as well as the countries in which they were mentioned.
A quick scan reveals that green banking challenges are not uniformly distributed. Notably, Africa and Asia face major challenges relating to policy, awareness, and infrastructure. Developed regions such as Europe and North America seem to suffer more from enforcement and credibility issues such as greenwashing. Figure 3 below provides a quick visual into these patterns.

3.3. Green Banking Opportunities

Similarly, this section presents the results of a thematic synthesis focusing on the major highlighted green banking opportunities that climate change presents to banks, clearly indicating the prevalences and regions in which the opportunities have been mentioned based on the selected corpus. While the list is not conclusive, as it includes only green banking opportunities or the regions in which they are implemented, the results paint a very insightful picture into what previous researchers in this domain consider as the most prevailing green banking opportunities. Similarly, the frequencies of occurrences for these themes and the regions in which they are prevalent are also summarized. Table 4 below presents the thematic analysis results focusing on the main opportunities identified.
Figure 4 below shows interesting results. Europe and Asia seem to lead overall in exploring green banking opportunities. Countries in the Middle East appear to be mostly involved in enhancing climate resilience and tapping into the emerging and growing green finance market. The North America region seems to appear steadily across all the three major themes. These findings emphasize the need for tailor-made green financing strategies due to the regional variations that exist among different markets in terms of policies, market readiness, and maturity. Figure 4 below provides a visual presentation of these patterns.

4. Discussion

4.1. Green Banking Practices

Table 2 above shows a variety of green banking activities undertaken by different banks globally with the most prevalent being digital banking, green loans or green sukuk for Islamic banks, financing for green services and green infrastructure, respectively. From the findings presented arise several interesting observations. First, this study reveals that religion influence is identified as a major source of motivation in advancing green banking and sustainable initiatives, especially among Islamic banks, as revealed by studies based in Indonesia, Bangladesh, Malaysia, Saudi Arabia, and UAE, among other regions where Islam is the dominant religion [76,77,78,79]. The study observes that the nature of banking activities in these areas is highly influenced by religion, and green Sukuk is a popular green product in advancing environmental actions in Islam-dominated regions.
This observation accords with another study by Harahap, Risfandy, and Futri, who stated that Sharia law is clear on the integration of sustainability principles, social justice, and welfare, as well as the proper utilization of resources [28]. Similarly, a study by Araminta, Qudziyah, and Timur recognized Green Sukuk as one of the significant advancements in Islamic financial instruments and has received increased public attention because of its ethical and environmental consciousness [29], which supports a similar sentiment by Faizi et al., who adds that green Sukuk is considered the principal product of Islamic green finance [30].
From the given findings, it can also be noted that it is highly important for regulatory bodies to support the adoption of green banking, especially given the critical role banking plays in promoting climate actions that help mitigate climate change [80,81]. Central banks have the responsibility of directly influencing the sustainability of banking operations by giving suggestions and establishing adequate policies and standards [82]. Development banks play a pivotal role in helping economies build resilience economies especially for advanced economies that are major polluters [33,83]. The Asian Development Bank, for instance, supports climate mitigation projects within the Asian and Pacific region [63,84]. Similarly, the European National Development Bank finances infrastructure projects aligned with the European green taxonomy [37]. In countries such as Bangladesh and India, the development of customized financial products has been quite effective in advancing SDG 13 and SDG 7 by promoting affordable and clean energy [38]. Similar observations are made in the African context by multilateral development banks with major green financing supports channeled to renewable energy projects, climate adaptation, mitigation projects and financial innovations that promote SDG 13 on climate action [39].
Finally, the thematic findings revealed that banks are engaged in various direct and indirect green banking activities. The thematic analysis reveals that banks across different geographical regions have expanded their product portfolio by including green financial products such as green bonds and sustainability-linked loans, and investing in and financing green infrastructure to manage their utility expenditures and serve their customers with high levels of convenience through mobile and Internet banking. These findings align with similar observations from other studies [85,86], which observe that banks are highly engaged in digital banking and green lending activities. This study reveals that bank responds to environmental factors differently, but the majority of them tend to invest in digital banking activities, designing and structuring different green products in their product portfolio to address the specific environmental concerns surrounding them. They are also supporting projects and businesses in green services, and the majority promote the adoption and financing of green infrastructure [44]. The degree to which these practices are implemented in the banks depend on several factors, some which are bank-specific, while others relate to the dynamics of the external environment [45].

4.2. Green Banking Challenges

The thematic analysis established socio-economic context and cultural resistance as major challenges hindering green banking practices especially in UAE, Pakistan, Saudi Arabia, Bangladesh, Nigeria, and Qatar [16,18,19,23,26,38,39,40,41,42]. This also leads to the problem of high transition risk and high cost of compliance for banks and businesses, as insinuated by several studies in Pakistan, India, China, Poland, and Indonesia [23,39,40,46,50,53]. This could be attributed to various factors including the non-malleability of the conservative financial systems especially in oil centric economies and to some extent low public awareness on potential green innovations [19]. Sustainable practices may not add immediate value to the bank creating a potential conflict between long-term sustainability goals and banks’ short-term profitability goals [47]. Similarly, a lack of awareness comes out as a consistent challenge hindering the implementation of green banking in UAE and Bangladesh [33,61]. These results imply that there is a necessity for banks to embark on sensitization and awareness creation to encourage the adoption of green banking practices [35].
Regulatory-related handles are mentioned in Indonesia, Poland, India, Nigeria, and Colombia, among other places, as a major hindrance to growth of green financing in these countries. Such a hindrance is associated with the inconsistencies in policies and unclear green taxonomies, which negatively affect investor confidence. These cases emphasize the need for good regulation in all forms of banking to promote sustainable banking activities [36,37].
Greenwashing concerns have been highlighted by studies in South Africa, Europe, India, North America, and China. This can be attributed to the fact these regions are emerging and growing ESM markets which often face criticism for insufficient verification and mislabeling of green products [53]. Also, greenwashing is attributed to a competitive business environment with insufficient regulations [87]. Greenwashing hurts green trust among consumers and can potentially harm a company’s brand image and reputation [88]. Greenwashing by banks has been criticized in various studies calling for more regulation [89].
Weak investor confidence has also been mentioned, especially in Nigeria, Colombia, Bangladesh, and Indonesia, majorly because of the under-developed green bond markets, low transparency for bond post issuance, and generally the high perceived risk [23,40,41,42,47,48]. In addition to these challenges, the low level of green loan uptake has been attributed to the short-term culture of commercial banks due to their limited capacity for long-term risk assessment, as mentioned in several studies in Bangladesh, Pakistan, India, and Nigeria, among others [23,39,40,46].

4.3. Green Banking Opportunities

The thematic analysis revealed three major green banking opportunities including sustainable banking as a strategic competitive advantage, green transition as an emerging market niche for banks, and enhanced capacity for banks to manage long-term climate-related risks. The majority of the studies reviewed from Italy, North America, India, China, and Europe, among others, identify green financing and green banking activities as a major driver for strategic and competitive advantage with about 18 appearances [16,18,43,44,45,47,49,50,54,55,56,57,58,59,60,61,62,63]. This trend can be attributed to the fact that banks, like other financial institutions, are leveraging on sustainability practices to enhance their long-term competitiveness, mitigate physical and transition risks, attract ESG-interested investors, and finance businesses that are seeking to comply with sustainability-related regulations, especially in developed economies. Similarly, other studies have identified green financing as an emerging and growing niche [3,28,64,65,66,67]. This can be explained by the growing prevalence of climate-related financial instruments, ESG-related funds, and the green bonds especially in emerging economies.
At the same time, studies across the globe and especially in Europe, Qatar, North America, Saudi Arabia, China, and India have revealed growing initiatives in sustainability disclosures, increased investments in climate risk assessment tools and the increased efforts for climate-related financial compliance as well as scenario analyses to future-proof lending and investment portfolios [16,50,56,60,67,68,69,70,71,72,73,74]. Xiaohang et al. however notes that corporate green innovation is highly affected by uncertainties in economic policies [90].
The synthesis also demonstrates that the various opportunities and threats that the diverse banks encounter are influenced by market forces and the overall economic climate within which the various banks exist. For instance, in Finland, climate risk accelerates green investment. In China, the involvement in genuine environmental innovations increases banks’ access to corporate finance, while greenwashing involvement decreases it. In addition, it is observed that the Chinese banks with higher green credit scores have greater market capitalization, thereby providing empirical evidence for the hypothesis that authentic green banking can be a rich source of competitive advantage for sustainable banks. These case studies show that green investments can be attractive in the market conditions of real commitment and openness as emphasized by Verena Hagspiel et al. in their study who argues that regulators should seek to be transparent about their future policies on green investments to minimize the risk where government retracts subsidies prematurely exposing green investors to business risks [91].
A similar study in China also reveals a positive correlation between green banking operations and big data technology proving that technology could be instrumental in enabling environmentally sustainable banking. These findings affirm other studies that have found green data as a key factor in green banking operations [72,73]. This is in support of another study which holds that fintech innovation fosters change in a way that enhances green banking operations [59].
This analysis acknowledges the fact that the process of green banking implementation is not without multiple challenges that range from regulatory, economic, cultural, awareness, greenwashing challenges, weak investor confidence, and cost-related issues, but the synthesis also unveils several opportunities that banks can leverage on to overcome these complexities. The study appreciates the huge basket of opportunities for banks, especially in strategic positioning, the emergence of new markets for banks’ financial products, and a long-term ability to mitigate against climate-related risks.

5. Conclusions, Recommendations, and Limitations

5.1. Conclusions

This study focused on pursuing three major objectives: The first was to identify the most prevalent green banking activities that different banks across the globe are undertaking. The second and third were to highlight the most prevent challenges and opportunities banks across different geographical locations encounter while undertaking their green banking initiatives. Based on the thorough synthesis of the literature presented above, the major findings can be concluded as follows:
First, banks participate in green banking directly through active green and operational roles such as lending and green products, or indirectly through enabling conditions and sustainable green banking initiatives such as eliminating paperwork, digital innovations that promote mobile and Internet banking, etc. The thematic analysis revealed that digital banking was the most prevent green banking activity, the second being the offering of green products such as green loans or sukuks, the third the financing of green services, and the fourth the investment in green infrastructure.
This study identifies three major green banking opportunities including green banking practices as a major source of strategic competitive advantage, an emerging and growing market niche for green products, and the capacity to manage long-term climate risks. Some of the major thematic green banking challenges highlighted include weak investor confidence, greenwashing concerns, regulatory handles, especially for less-developed regions, social economic and cultural resistance, transition risk, and the high cost of compliance.

5.2. Implications

This study provides valuable information on how banks are responding to the challenge of climate change, clearly highlighting the challenges surrounding this endeavor, while at the same time highlighting the green banking opportunities banks are exploring. The following specific implications can be made from this study. First, while some green banking practices such as digital banking and green lending are highly prevalent across different regions, the nature of their implementation and the levels of engagement by the banks are largely influenced by the social economic, cultural, and regulatory contexts. Secondly, while green banking challenges cut across all regions, some are more prevalent for certain regions depending on the level of market readiness, maturity, and stability, thus emphasizing the need for localized green banking practices. Previous studies have identified that banks across all regions have explored the opportunities that green banking practices present, emphasizing the great financial and strategic potential of sustainable banking practices.

5.3. Limitations and Recommendations

This study was based on the literature obtained from two databases only, i.e., Web of Science and Scopus, as of February 2025, out of which a total 159 articles were obtained, and 62 were finally included in the thematic review. The results are therefore limited to the selected corpus, and the patterns observed may therefore change with time as more studies becomes available and as banks continue to innovate by establishing more green banking strategies. Future similar studies could extend the list of databases to build a bigger corpus for the synthesis of the literature upon which the study is based. Also, while the current study utilized the systematic review approach, future studies could explore alternative research approaches such as meta-analysis or studies based on primary and quantitative data to reveal the dynamic status of the interplay between green banking practices, changing opportunities, and challenges.

Author Contributions

Conceptualization, M.K.M. and M.F.-F.; methodology, M.K.M.; software, M.K.M.; validation, M.K.M. and S.K.E.-G.; formal analysis, M.K.M. and S.K.E.-G.; investigation, M.K.M. and M.F.-F.; resources, M.K.M. and S.K.E.-G.; data curation, M.K.M. and S.K.E.-G.; writing—original draft preparation, M.K.M.; writing—review and editing, S.K.E.-G. and M.F.-F.; visualization, M.K.M. and S.K.E.-G.; supervision, M.F.-F.; project administration, S.K.E.-G.; funding acquisition, M.F.-F. All authors have read and agreed to the published version of the manuscript.

Funding

This research did not receive external funding.

Data Availability Statement

If you have further questions, please contact muchiri.martin.kamau@phd.uni-mate.hu; or martinmuchiri16@gmail.com.

Acknowledgments

The authors thank the Hungarian University of Agriculture and Life Sciences and Stipendium Hungaricum for their support.

Conflicts of Interest

The authors declare no conflicts of interest.

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Climate 13 00102 g001
Figure 1. Above presents the review process based on the PRISMA 2020 flow chart clearly demonstrating the identification, screening and final inclusion criteria of the selected corpus.
Figure 1. Above presents the review process based on the PRISMA 2020 flow chart clearly demonstrating the identification, screening and final inclusion criteria of the selected corpus.
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Climate 13 00102 g002
Figure 2. Visualizes the most prevalent green banking practices identified highlighting the dominance of digital banking as the most adopted green banking practice, followed by development and issuance of green financial products, green services and financing of green infrastructure.
Figure 2. Visualizes the most prevalent green banking practices identified highlighting the dominance of digital banking as the most adopted green banking practice, followed by development and issuance of green financial products, green services and financing of green infrastructure.
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Climate 13 00102 g003
Figure 3. Shows the distribution of the most prevalent green banking challenges by regions showing how developed and developing regions tend to experience distinct set of green banking challenges.
Figure 3. Shows the distribution of the most prevalent green banking challenges by regions showing how developed and developing regions tend to experience distinct set of green banking challenges.
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Climate 13 00102 g004
Figure 4. Visually demonstrates the regional distribution of green banking opportunities emphasizing the need for tailor-made green financing strategies that take into consideration the regional variations due to different regulation frameworks, market maturity and readiness for green financing products.
Figure 4. Visually demonstrates the regional distribution of green banking opportunities emphasizing the need for tailor-made green financing strategies that take into consideration the regional variations due to different regulation frameworks, market maturity and readiness for green financing products.
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Table 1. Summary of inclusion and exclusion criteria applied.
Table 1. Summary of inclusion and exclusion criteria applied.
Factor ConsideredInclusion CriteriaExclusion CriteriaNature of Inclusion/Exclusion
Period2018–2025Articles published before 2018Database automatic filtering tools
LanguageEnglishOther languages other than EnglishDatabase automatic filtering tools
Document typePeer-reviewed articlesWOS (reviews, early access papers, proceeding papers, retracted publications)
Scopus (book chapters, reviews, conference papers, erratum)		Database automatic filtering tools
RelevanceRelevant to at least one of the research questionsArticles not relevant to at least one research questionManual title and abstract reviews
Source: Authors’ work.
Table 2. Summary of most prevalent green banking activities.
Table 2. Summary of most prevalent green banking activities.
Green Banking ActivitiesTotal FreqTop Five Most Prevalent ActivitiesSources
Digital Banking46Paperless transactions
Online and mobile banking
AI and blockchain-based sustainability apps for green financing tracking
Digital reporting and e-statements
ATMs		[13,14,15,16,17,18]
Green loans/Sukuk products29Renewable energy projects
Financing the purchase of electric vehicles
Green mortgages for energy-efficient homes,
Subsidized loans for green transition-related investments and projects among others
Offering financial incentives for eco-friendly home improvements		[19,20,21,22,23,24,25,26,27,28,29,30]
Green Services25Personal ESG calculators and management
Savings linked to green investments
Offering rewards or cashback for sustainable lifestyle
Offering sustainability investment portfolios
Facilitating and supporting carbon credit trading transactions		[27,28,31,32,33,34,35,36,37]
Green Infrastructure15Solar-powered ATMs
Smart lighting
Energy-efficient buildings
Installation of EV chargers in the bank’s buildings
Investing in green data centers among others		[38,39,40,41,42,43,44,45,46]
Source: Authors work.
Table 3. Major thematic challenges.
Table 3. Major thematic challenges.
Major Thematic ChallengesFrequenciesMost Prevalent CountriesSources
Weak investor confidence in green bonds and related products6Nigeria, Colombia, Bangladesh, Indonesia[23,40,41,47,48]
Greenwashing concerns5South Africa, Europe, India, North America, China[23,24,42,49,50]
Regulatory handles8Indonesia, Poland, India, Nigeria and Colombia[1,16,19,40,41,42,51,52]
Social economic and cultural resistance11UAE, Pakistan, Saudi Arabia, Bangladesh, Nigeria, Qatar, Russia[16,19,23,26,39,40,41,42,43,53]
Transition risk and high cost of compliance6Pakistan, India, China, Poland, Indonesia[23,40,41,47,51,54]
Table 4. Major thematic green banking opportunities.
Table 4. Major thematic green banking opportunities.
Major Thematic OpportunitiesFreqMost Prevalent RegionsSources
Sustainable banking as a strategic and competitive advantage18Italy, North America, India, China, Europe[16,18,44,45,46,48,50,51,55,56,57,58,59,60,61,62,63,64]
Emerging and growing market Niche6Europe, Qatar, North America, Saudi Arabia, China and India[3,28,65,66,67,68]
Long-term climate risk management capacity12Europe, Qatar, North America, Saudi Arabia, China and India[16,51,57,61,68,69,70,71,72,73,74,75]
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Muchiri, M.K.; Erdei-Gally, S.K.; Fekete-Farkas, M. Green Banking Practices, Opportunities, and Challenges for Banks: A Systematic Review. Climate 2025, 13, 102. https://doi.org/10.3390/cli13050102

AMA Style

Muchiri MK, Erdei-Gally SK, Fekete-Farkas M. Green Banking Practices, Opportunities, and Challenges for Banks: A Systematic Review. Climate. 2025; 13(5):102. https://doi.org/10.3390/cli13050102

Chicago/Turabian Style

Muchiri, Martin Kamau, Szilvia Kesmarki Erdei-Gally, and Maria Fekete-Farkas. 2025. "Green Banking Practices, Opportunities, and Challenges for Banks: A Systematic Review" Climate 13, no. 5: 102. https://doi.org/10.3390/cli13050102

APA Style

Muchiri, M. K., Erdei-Gally, S. K., & Fekete-Farkas, M. (2025). Green Banking Practices, Opportunities, and Challenges for Banks: A Systematic Review. Climate, 13(5), 102. https://doi.org/10.3390/cli13050102

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