DOI: https://doi.org/10.14710/dijb.8.1.2025.%25p

Green banking practices and HRM in enchancing innovation capability: A knowledge management perspective on sharia banking performance

1Faculty of Economics, Law and Humanities, Universitas Ngudi Waluyo, Indonesia, Indonesia

2Jl. Diponegoro No.186, Ngablak, Gedanganak, Kec. Ungaran Tim., Kabupaten Semarang, Jawa Tengah 50512, Indonesia

3Universitas Islam Sultan Agung, Indonesia, Indonesia

4 Universitas Islam Sultan Sharif Ali, Brunei Darussalam, Brunei Darussalam

View all affiliations
Open Access Copyright 2025 Diponegoro International Journal of Business under http://creativecommons.org/licenses/by-sa/4.0.

Citation Format:
Abstract
This study investigates the influence of green banking practices and human resource management (HRM) on innovation capability and examines the mediating role of knowledge management in enhancing Sharia banking performance. Using a quantitative approach with Structural Equation Modeling (SEM) based on Partial Least Squares (PLS), data were collected through questionnaires distributed to employees using a saturated sampling technique. The findings reveal that HRM significantly affects green banking, innovation capability, and knowledge management. However, innovation capability does not significantly mediate the relationship between green banking and performance, nor between HRM and performance. In contrast, knowledge management significantly mediates the effect of HRM on Sharia banking performance. The results highlight the critical role of HRM and knowledge management in driving organizational performance, while emphasizing the need for more effective implementation of green banking and innovation strategies to realize their full potential impact.
Fulltext
Keywords: green banking; human resource management; innovation capability; knowledge management; sharia banking performance

Article Metrics:

Article Info
Section: Articles
Language : EN
Recent articles
Green banking practices and HRM in enchancing innovation capability: A knowledge management perspective on sharia banking performance Exploring the Impact of Inclusive Leadership and Exploitative Innovation Capability on Tourism Performance Balancing work and life: Social media’s mediating role in enhancing employee performance More recent articles
  1. Ahmad, F., Hossain, M. B., Mustafa, K., Ejaz, F., Khawaja, K. F., & Dunay, A. (2023). Green HRM Practices and Knowledge Sharing Improve Environmental Performance by Raising Employee Commitment to the Environment. Sustainability (Switzerland) , 15(6). https://doi.org/10.3390/su15065040
  2. Ahmar, N., Rahmah, L. Al, & Darminto, D. P. (2024). Green banking disclosure from the perspective of corporate governance, financial slack and human resource slack in Indonesia. Banks and Bank Systems, 19(2), 101–114. https://doi.org/10.21511/bbs.19(2).2024.08
  3. Ahmmed, N. M. U. &. (2018). Islamic Banking and Green Banking for Sustainable Development: Evidence from Bangladesh. Journal of Islamic Economics, 10, 34–48
  4. Ahyani. (2021). Building the Values of Rahmatan Lil ’Alamin for Indonesian Economic Development at 4.0 Era from the Perspective of Philosophy and Islamic Economic Law. Al-Ihkam : Jurnal Hukum & Pranata Sosial, 16, 111–136
  5. Aisyah, M. (2018). Islamic Bank Service Quality. Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics), 10(2), 367–388
  6. Ali. (2021). “A social practice theory perspective on green marketing initiatives and green purchase behavior.” Cross Cultural & Strategic Management, 18, 818–838
  7. Ali, N., & Atan, T. (2020). … of Human Resource Management Practices on Sustainable Performance in the Banking Sector (a Comparative Study between Islamic and Conventional Banks …. … Journal of Early Childhood Special …, XXIX, 1811–1826. https://doi.org/10.24205/03276716.2020.1177
  8. Alma, S., Nur, S., Zulkiffli, A., Hazimah, N., & Mat, N. (2024). The Link between Green Human Resource Management and Job Performance: Investigating the Mediating Role of Organizational Culture. Journal of System and Management Sciences, 14(12), 114–128. https://doi.org/10.33168/jsms.2024.1207
  9. Alsakarneh, A., Shatnawi, H. A., Alhyasat, W. B. A. K., Zowid, F., Alrababah, R. A. M., & Eneizan, B. (2024). The effectiveness of human resource management practices on increasing organizational performance and the mediating effect of employee engagement. Uncertain Supply Chain Management, 12(2), 1141–1154. https://doi.org/10.5267/j.uscm.2023.11.019
  10. Amuda, Y. J., & Alamri, R. A. (2024). Green banking practices: Towards sustainable banking sector for financial inclusion in attaining Saudi Arabia’s Vision 2030. Journal of Infrastructure, Policy and Development, 8(9), 4565. https://doi.org/10.24294/jipd.v8i9.4565
  11. Anjum, N., Rahaman, M. S., Choudhury, M. I., & Rahman, M. M. (2022). An Insight into Green HRM Practices for Sustainable Workplace in the Banking Sector of Bangladesh: The Role of Electronic HRM. Journal of Business Strategy Finance and Management, 04(01), 66–80. https://doi.org/10.12944/jbsfm.04.01.06
  12. Anwar, M. Z., & Jati, L. J. (2023). Increasing the Organizational Green Performance through Green HRM Practices and Islamic Spiritual Intelligence. TheJournalish: Social and Government, 4(4), 496–512. https://doi.org/https://doi.org/10.55314/tsg.v4i4.626
  13. Awan, U., Braathen, P., & Hannola, L. (2023). When and how the implementation of green human resource management and data-driven culture to improve the firm sustainable environmental development? Sustainable Development, 31(4), 2726–2740. https://doi.org/10.1002/sd.2543
  14. Banerjee. (2001). Shades of Green: A Multidimensional Analysis of Enviromental Advertising. Journal of Advertising, 24, 1–12
  15. Bason. (2010). Co-creation is key to innovation in government. Ipsos MORI Understanding Society, 10, 111–121
  16. Bouteraa, M., Hisham, R. R. I. bin R., & Zainol, Z. (2020). Green Banking Practices From Islamic and Western Perspectives. International Journal of Business, Economics and Law, 21(5), 1–11
  17. Cabello. (2011). No TitleLeveraging the innovative performance of human capital through HRM and social capital in Spanish firms. International Journal of Human Resource Management, 12, 807–828
  18. Cabrita. (2009). Intellectual Capital and Business Performance in Pourtugise Banking Industry. International Technology Management, 03, 47–58
  19. Chen, J., Siddik, A. B., Zheng, G. W., Masukujjaman, M., & Bekhzod, S. (2022). The Effect of Green Banking Practices on Banks’ Environmental Performance and Green Financing: An Empirical Study. Energies, 15(4), 1–22. https://doi.org/10.3390/en15041292
  20. Dakhan, S. A., Sohu, J. M., Jabeen, A., Mirani, M. A., Shaikh, J. A., & Iqbal, S. (2020). Impact of Green HRM on Employees Pro-Environmental Behavior: Mediating Role of Women Environmental Knowledge at Higher Education Institutions. IJCSNS International Journal of Computer Science and Network Security, 20(12), 202–208. https://doi.org/10.22937/IJCSNS.2020.20.12.222
  21. Din, A. U., Yang, Y., Yan, R., Wei, A., & Ali, M. (2024). Growing success with sustainability: The influence of green HRM, innovation, and competitive advantage on environmental performance in the manufacturing industry. Heliyon, 10(10), e30855. https://doi.org/10.1016/j.heliyon.2024.e30855
  22. El Badawy, T. A., Chinta, R., & Magdy, M. M. (2018). Does ‘gender’ mediate or moderate the relationship between ‘quality of work life’ and ‘organizational commitment’?: Evidence from SMEs in Egypt. Gender in Management, 33(4), 332–348. https://doi.org/10.1108/GM-04-2017-0050
  23. Faeni, D. P. (2024). Green practices and employees’ performance: The mediating roles of green human resources management policies and knowledge development. Journal of Infrastructure, Policy and Development, 8(8), 4924. https://doi.org/10.24294/jipd.v8i8.4924
  24. Fawehinmi, O., Yusliza, M. Y., Mohamad, Z., Noor Faezah, J., & Muhammad, Z. (2020). Assessing the green behaviour of academics: The role of green human resource management and environmental knowledge. International Journal of Manpower, 41(7), 879–900. https://doi.org/10.1108/IJM-07-2019-0347
  25. Firdaus. (2013). Maslahah Scorecard (Masc) Sistem Kinerja Bisnis Berbasis Maqashid Al-Shari‟ah. Jakarta (1st ed.). Sekolah Pascasarjana UIN Syarif Hidayatullah
  26. Hadjri. (2015). International Review of Management and Marketing Islamic Human Resource Management, Organizational Commitment and Employee Performance: A Case Study on Sharia Bank in South Sumatera. International Review of Management and Marketing, 01, 123–129
  27. Hair. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2nd ed.). SAGE Publications
  28. Haque, M. A., Islam, M. A., & Soh, S. H. (2024). Green HRM practices and green work engagement: The roles of green knowledge sharing and green group cohesion. Global Business and Organizational Excellence, 14, 1–16. https://doi.org/10.1002/joe.22266
  29. Haryadi, Y., Narimawati, U., & Syafei, M. Y. (2024). Tec Empresarial The Effect of Information Technology Utilization. Business International Management, 21, 13–26. https://doi.org/https://doi.org/10.1229/tecempresarialjournal.v19i2.490
  30. Henry Simamora. (2012). Manajemen Sumber Daya Manusia (1st ed.). Gramedia Pustaka Utama
  31. Herman. (2018). The Influence of Market Orientation and Product Innovation on the Competitive Advantage and Its Implication toward Small and Medium Enterprises (UKM) Performance. International Journal of Science and Engineering Invention, 08, 1–22
  32. Iryani, & S.F, L. (2021). Implementation of Green Islamic Banking in Indonesia. Utopía y Praxis Latinoamericana, 26, 140–160. https://www.redalyc.org/articulo.oa?id=27968020013
  33. Islam, M. A., Yousuf, S., H. (2014). Green financing in Bangaladesh: hallenges and opportunities- a descriptive approach. International Journal of Green Economics, 09, 17–32. https://doi.org/www.sciencedirect.com/10.1504/IJGE.2014.064469
  34. Jawaid. (2021). Islamic banking and customer satisfaction in Pakistan: evidence from internal and external customers. Journal of Islamic Marketing, Ahead-of-Print(Aheadof-Print)., 11, 11–23. https://doi.org/https://doi.org/10.1108/JIMA-09-2020-0297
  35. Jelli, R., & Dura, J. (2023). Analysis Of The Influence Of Green Banking And Operational Cost Efficiency On Return On Assets. International Journal of Educational Research & Social Sciences, 12, 747–752. https://ijersc.org/
  36. Jermsittiparsert, K. (2021). Linking Green Human Resource Management Practices with Green Employee Behavior: The Role of Environmental Knowledge as a Mediator. E3S Web of Conferences, 277. https://doi.org/10.1051/e3sconf/202127706002
  37. Jillani, H., Chaudhry, M. N., Zahid, H., & Iqbal, M. N. (2024). The mediating role of stakeholders on green banking practices and bank’s performance: The case of a developing nation. PLoS ONE, 19(5 May), 1–17. https://doi.org/10.1371/journal.pone.0300585
  38. Julia, T., & Kassim, S. (2020). Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework. Journal of Islamic Marketing, 11(3), 729–744. https://doi.org/10.1108/JIMA-10-2017-0105
  39. Juwaheer. (2019). Analysing the impact of green marketing strategies on consumer purchasing patterns in Mauritius. World Journal of Entrepreneurship, Management and Sustainable Development, 19, 36–59
  40. Kalmuk. (2016). The Mediating Role of Organizational Learning Capability on The Relationship Between Innovation and Firm’sPerformance : A Conceptual Framework. Procedia – Social and Behavioral Sciences, 14, 164–169
  41. Kim, J., & Jung, H. S. (2022). The Effect of Employee Competency and Organizational Culture on Employees’ Perceived Stress for Better Workplace. International Journal of Environmental Research and Public Health, 19(8). https://doi.org/10.3390/ijerph19084428
  42. Majeed. (2022). Green Marketing Approaches and Their Impact on Green Purchase Intentions: Mediating Role of Green Brand Image and Consumer Beliefs towards the Environment. Sustainability (Switzerland), 14, 51–67
  43. Mangkunegara. (2015). Manajemen Sumber Daya Manusia Perusahaan (5th ed.). Remaja Rosdakarya
  44. Marditama, T., Yusliza, M. Y., & Purnomo, A. K. (2024). The Link Between Green Human Resource Management and Environmental Performance through Green Innovation Practices: A Mini Literature Review During Year 2019-2023. Jesya, 7(2), 1317–1331. https://doi.org/10.36778/jesya.v7i2.1581
  45. Mawardi. (2010). Fiqh Minoritas: Fiqh al-’Aqalliyāt dan Evolusi Maqāṣid al-Sharī‘ah dari Konsep ke Pendekatan (1st ed.). PT Elexmedia Komputindo
  46. Moraes, S. de S., Chiappetta Jabbour, C. J., Battistelle, R. A. G., Rodrigues, J. M., Renwick, D. S. W., Foropon, C., & Roubaud, D. (2019). When knowledge management matters: interplay between green human resources and eco-efficiency in the financial service industry. Journal of Knowledge Management, 23(9), 1691–1707. https://doi.org/10.1108/JKM-07-2018-0414
  47. Mubarak, N., Khan, J., Ali, M., & Pesämaa, O. (2024). Roadmap to Achieve Green Project Performance: The Role of Knowledge Co-creation. Journal of the Knowledge Economy, 0123456789. https://doi.org/10.1007/s13132-024-01779-2
  48. Nart, S., Bilgili, A., & Orgut, E. D. (2024). The Effect of Green Human Resources Management Practices on Corporate Sustainability from the Perspective of Employees. Economics, 18(1). https://doi.org/10.1515/econ-2022-0060
  49. Nawangsari, L. C., & Sutawijaya, A. H. (2019). Green Human Resources Management for Business Sustainability in Banking Institutions. International Journal of Managerial Studies and Research, 7(9), 12–16. https://doi.org/10.20431/2349-0349.0709002
  50. Niazi, U. I., Nisar, Q. A., Nasir, N., Naz, S., Haider, S., & Khan, W. (2023). Green HRM, green innovation and environmental performance: the role of green transformational leadership and green corporate social responsibility. Environmental Science and Pollution Research, 30(15), 45353–45368. https://doi.org/10.1007/s11356-023-25442-6
  51. Nurcahyo, S. A. (2024). The Role of Organizational Learning Culture and Workplace Empowerment in Improving Workplace Spirituality through Knowledge Sharing Behavior as a Mediation Variable. International Journal of Islamic Business Ethics, 9(1), 15. https://doi.org/10.30659/ijibe.9.1.15-31
  52. Nurcahyo, S. A., Widagdo, T. H., & Ali, A. (2024). Talent Management Strategy in Career Development with Capacity Building Practices within the Local Government Organization of Semarang Regency. Proceedings of the 4th International Conference on Law, Social Sciences, Economics, and Education, ICLSSEE 2024, 25 May 2024, Jakarta, Indonesia, 02, 19–34. https://doi.org/10.4108/eai.25-5-2024.2348957
  53. Putri, R. N., Putri, J. K., Christanti, R., & Nugroho, A. H. L. (2024). Investigating the Impact of Green Banking on Efficiency Strategy: Evidence from Indonesia. The Indonesian Journal of Accounting Research, 27(01), 157–178. https://doi.org/10.33312/ijar.751
  54. Rath. (2015). An Impact og Green Marketing on Practices of Supply Chain Management in Asia: Emerging Economic Opportunities and Challenges. International Journal of Supply Chain Management, 02, 11–19
  55. Rehman, A., Ullah, I., Afridi, F. e. A., Ullah, Z., Zeeshan, M., Hussain, A., & Rahman, H. U. (2021). Adoption of green banking practices and environmental performance in Pakistan: a demonstration of structural equation modelling. Environment, Development and Sustainability, 23(9), 13200–13220. https://doi.org/10.1007/s10668-020-01206-x
  56. Rimi, N. N. (2016). Green HRM for Green Services: A Proposed Best Practices Green HRM Model for Green Banking Performance in Bangladesh. European Journal of Business and Management Www.Iiste.Org ISSN, 8(8), 60–69. www.iiste.org
  57. Sajeda Alma’abreh, Siti Nur ‘Atikah Zulkiffli, & Nik Hazimah Nik Mat. (2023). Leveraging Green Human Resource Management and Organizational Culture in Performance. Journal of Namibian Studies : History Politics Culture, 33, 121–134. https://doi.org/10.59670/jns.v33i.418
  58. Salman, S., & Hamid, S. (2018). Journal of Organisational Studies and Innovation. Journal of Organisational Studies and Innovation, 5(1), 25–36
  59. Santoso. (2022). Pentahelix’s Collaboration In The Development of Halal Tourism For Sustainable Regional Economic Development. IQTISHADIA Jurnal Ekonomi & Perbankan Syariah, 22, 1–27
  60. Sarfraz, M., Khawaja, K. F., Khalil, M., & Han, H. (2023). Knowledge-based HRM and business process innovation in the hospitality industry. Humanities and Social Sciences Communications, 10(1). https://doi.org/10.1057/s41599-023-02140-9
  61. Sayadi;, S., & Farzan, F. (2015). the Mediating Effect of the Knowledge Management Capabilities on the Relationship Between the Human Resource Management and Innovation in. Indian Journal of Fundamental and Applied Life Sciences, 5, 135–145
  62. Schulers. (2011). Global Talent Management and Golbal Talent Challenges: Global Talent Strategic Opportunities for HRM. Journal of World Business, 01, 88–92
  63. Sehen Issa, J., Abbaszadeh, M. R., & Salehi, M. (2022). The Impact of Islamic Banking Corporate Governance on Green Banking. Administrative Sciences, 12(4). https://doi.org/10.3390/admsci12040190
  64. Setyaningrum, R. P., & Muafi, M. (2023). Green Human Resources Management on Business Performance: The Mediating Role of Green Product Innovation and Environmental Commitment. International Journal of Sustainable Development and Planning, 18(1), 209–220. https://doi.org/10.18280/ijsdp.180122
  65. Sharit, J., Hernández, M. A., Czaja, S. J., & Pirolli, P. (2008). Investigating the roles of knowledge and cognitive abilities in older adult information seeking on the Web. ACM Transactions on Computer-Human Interaction, 15(1), 1–29. https://doi.org/10.1145/1352782.1352785
  66. Suppiah, V., & Sandhu, M. S. (2011). Organisational culture’s influence on tacit knowledge-sharing behaviour. Journal of Knowledge Management, 15(3), 462–477. https://doi.org/10.1108/13673271111137439
  67. Suseno, G., & Muthohar, M. (2018). The effect of service Quality to customer satisfaction and loyalty in Sharia Bank. 186(Insyma), 186–190. https://doi.org/10.2991/insyma-18.2018.46
  68. Susilo, H., & Mayowan, Y. (2024). Developing a Model for Increasing Human Resource Capacity in Multi- Businesses for the SME sector in Indonesia a Comprehensive Approach. International Journal of Religion, 5(11), 8612–8625. https://doi.org/10.61707/vgwsep98
  69. Tamer Cavusgil, S., Calantone, R. J., & Zhao, Y. (2003). Tacit knowledge transfer and firm innovation capability. Journal of Business & Industrial Marketing, 18(1), 6–21. https://doi.org/10.1108/08858620310458615
  70. Tirno, R. R., Islam, N., & Happy, K. (2023). Green HRM and ecofriendly behavior of employees: Relevance of proecological climate and environmental knowledge. Heliyon, 9(4), e14632. https://doi.org/10.1016/j.heliyon.2023.e14632
  71. Uddin, M. S., Rahaman, M. A., Latif, W. Bin, Dona, P. Das, & Kundu, D. (2023). Impact of green HRM practices on bank employee service behaviors. Banks and Bank Systems, 18(4), 85–93. https://doi.org/10.21511/bbs.18(4).2023.08
  72. Voss, D. (2003). Knowledge Management, An Introduction to creating competitive advantage from intellectual capital (1st ed.). Vision Book
  73. Wikaningrum, T., & Kartikasari, L. (2023). Integration of talent management and knowledge management for enhancing innovation performance. Jurnal Ekonomi Dan Bisnis, 26(Oktober), 331–348
  74. Yasa, P. A., Suciptawati, N. L. P., & Susilawati, M. (2017). Implementasi Analisis Faktor Dalam Menganalisis Kepuasan Nasabah Terhadap Kualitas Layanan (Studi Kasus : Lpd Sidakarya). E-Journal Matematika, 6(2), 152–160
  75. Zuñiga-Collazos, A., Lozada, N., & Perdomo-Charry, G. (2020). Effect of absorption capacity acquired on organisational performance. International Journal of Innovation Management, 24(5), 1–19. https://doi.org/10.1142/S1363919620500486

Last update:

No citation recorded.

Last update:

No citation recorded.