Effect of Green Operations Practices on Financial Performance of Commercial Banks in Kenya

Abstract

Green operations relates to all aspects related to product manufacturing, usage, handling, logistics and waste management. Environmental protection and economic burden on industry is leading organizations toward re-evaluation of their corporate strategies including operations and business performance. Environmental operations management is the integration of environmental management principles with the decision making process for converting resources into usable products. The implementation of this management programmes has an impact on the environmental financial and operational performance of the firm. This study therefore sought to determine the adoption of green operations practices and their influence on the financial performance of commercial banks in Kenya. The objectives of the study were: to find out the extent to which commercial banks in Kenya have adopted green operations practices, to determine the influence of green operations practices on financial performance of commercial banks in Kenya and to find out challenges commercial banks in Kenya face in adopting green operations practices. The study adopted a correlational descriptive design. It targeted all the 44 commercial banks in Kenya. Data was collected from both primary and secondary sources. Secondary data on ROI was obtained from published financial reports of the Kenyan banks. Primary data was collected using a structured questionnaire that was administered through the „drop and pick later‟ method. The study established that banks have adopted different green operations practices such as environmental policies and goals, green lending, green processes and procedures and green products and services. It also determined that poorly defined objectives, inadequate infrastructure to support the initiatives, limited training and certification for practitioners in operating and Minimal or ineffective enforcement and inspection procedures for green operations practices were the challenges faced by banks in the adoption of green operations practices. Finally, the study found out an insignificant positive relationship between green operations practices adoption and financial performance. In conclusion the study recommends that all banks carry out green operations practices