The present study seeks to explore the factors influencing the adoption of green banking practices in commercial banks across Pakistan. It also evaluates the potential relationship between these identified factors (economic factors, stakeholders’ pressure and loan demand) and implementation of green banking practices. Current study is quantitative research based on structure equation model techniques to attain the objectives. Data is collected from banks’ employees through questionnaire. Before the structure equation model (SEM), initial necessary testing, including convergent validity and confirmatory factor analysis, was also performed. The findings of the SEM model suggest that economic factors, stakeholder pressure and loan demand have significant and positive influences on the adoption of green banking practices in commercial banks. The study is helpful for policymakers, environmentalists, government and regulatory authorities to get insight into the picture before developing and implementing green banking initiatives.

Keywords: Green Banking; Adoption; Economic; Stakeholder; Loan Demand; Structure Equation Model; Commercial Banks; Pakistan.