From Responsibility to Performance: Examining the Mediating Role of Reputation in CSR and Green Finance Relationships

Abstract

In recent years, increasing environmental awareness and corporate social responsibilities have driven banks into greener and more socially responsible practices. Particularly, in emerging economies such as Pakistan, banks have been put under increasing pressure to align profits with sustainability and social responsibilities. This has elevated the role of company’s reputation as a factor in securing long-term success.

This study is designed to investigate the relationship between corporate social responsibility (CSR), green finance (GF) and business performance (BP) in the framework of the Pakistani banking industry with special consideration of business reputation (BR) as a mediator. A quantitative research design was followed and 200 bank managers were sampled using simple random sampling techniques. This analysis was facilitated by using Smart PLS, and Structural Equation Modelling (SEM) was used to test the proposed hypotheses.

The results indicate that CSR and green finance can be seen as having a positive and significant influence on the business reputation and business performance. In addition, the role of business reputation was statistically confirmed to be between CSR, green finance, and business performance. The result shows that out of the different aspects of CSR, environmental responsibility was the most significant, followed by charitable responsibility, legal responsibility, ethical responsibility, economic responsibility and social responsibility, respectively.

The results also confirm a strong interrelationship among CSR, green finance, and business performance, indicating that organizations engaged in sustainable and socially responsible practices are more likely to enhance their reputational capital and achieve superior performance outcomes. These findings carry important implications for firms, entrepreneurs, communities, scholars, and policymakers, particularly in the context of developing economies like Pakistan. This study contributes to both theoretical and practical domains by highlighting the strategic importance of integrating CSR and green finance initiatives to foster sustainable business growth and long-term competitiveness.