Sustainability-Protective Behaviour in Malaysian CommercialBanks:A Panel Analysis Using Protection Motivation Theory
DOI:
https://doi.org/10.24191/we4c2x44Keywords:
Sustainability protection behaviour, Protection motivation theory, Banking industry, ESG integration, Sustainable financeAbstract
The concept of sustainability is of urgent necessity to the Malaysian commercial banks because of the growing regulatory pressures, demands of stakeholders, and international environmental issues. Nonetheless, there is little knowledge of the behavioural and organisational dynamics that motivate banks to practice sustainability-protecting practices, including sustainable financing (SF), especially within a systematic theoretical framework. This gap is filled by this study through the implementation of Protection Motivation Theory (PMT) to determine the impacts of perceived macroeconomic threats, internal financial resilience, and operational efficiency on the sustainability intentions and actions of banks. The Overnight Policy Rate (OPR), Capital Adequacy Ratio (CAR), and the Cost-to-Income Ratio (CIR) represent the threat appraisal, coping appraisal, and response cost, respectively. The behavioural intention is captured in the environmental, social, and governance (ESG) performance and is a reflection of SF as the actual protectiveness of sustainability. A random-effects panel regression model, applied to Malaysian commercial banks, demonstrates that OPR has an adverse and significant impact on ESG performance, and CAR positively affects ESG. Meanwhile, CIR lacks significant influence on ESG. ESG is important in enhancing sustainable funds and mediates the relationships between OPR and CAR and SF, with mediation being validated based on the Sobel test. Besides, CIR does not exhibit any mediation effect. These findings reveal the applicability of capital adequacy and ESG engagement in transforming the perceived risk and internal potentials into long-term banking activities, to derive both theoretical and practical consequences of progressing the concept of sustainability in the Malaysian banking industry.
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