Green Marketing Strategies and Their Impact on Brand Trust and Customer Loyalty in the Banking Sector

Abstract

There is a greater expectation of banks to show environmental responsibility in the design, communication and delivery of their services as well as in their lending. Green marketing has thus become a key instrument for the positioning of banks as responsible entities and therefore for establishing lasting relationships of banking business with the customers. This study was based on commitment–trust theory and signaling theory, and investigated the degree of green marketing practice implemented by banks in creating their brand image, as well as the influence of green marketing on brand trust and brand loyalty. Using a structured questionnaire, the data were collected from the bank customer and 400 usable questionnaires were analyzed using descriptive statistics in SPSS and partial least squares structural equations modeling (PLS-SEM) in SmartPLS 4, where green marketing is specified as a higher order conceptual construct consisting of four dimensions. The measurement model had good reliability, convergent and discriminant validity. The findings suggest that banks do moderately well with regards to green marketing practices (overall mean = 3.80), with the green dimension being the most visible, and green finance or CSR being the least. Green marketing significantly and positively influenced both brand trust (β = 0.680, p < 0.001) and brand loyalty (β = 0.620, p < 0.001) accounting for 46.2% and 38.4% of their variance, respectively. Both hypotheses were confirmed. The results are applicable to bankers who are interested in making environmental commitments translate into trust and loyalty.