Application of green banking on financing infrastructure project industry: Environmental perspective

Abstract

Presently, the rapid transformation of economic creates the more significant attention to the environmental impact. The large-scale business activities emerge financial gaps that require the hedge funds support for longer investment necessity without raising up the ecological problem. The infrastructure project should consider the sustainability aspect, to achieve environmentally friendly development. Financial institutions have a significant position to change economic and infrastructure development to be more responsible and classified as a 'green institution. The implementation of green banking or finance system proposes a solution to the sustainability resources. This study first focuses on the overview of green banking structure and its impact on the people, profit, and planet. This study aims to provide a general overview and determine the priority options related to green banking implementation in Indonesia. Besides, the paper explores the criteria preference of policy determination to implement the financial system using AHP approach. The assessments involve several aspects on different dimensions. However, it is apparent that the model illustrated reasonable and applicable solutions for the case. The result of this paper shows that the priority rank for green banking implementation sequentially is formulating policy (64,64%), developing market mechanism (25,54%) and providing incentives for research and development (9,82%). Finally, the research supports the assumption that green banking scheme is an alternative solution to establish ecological protection resulted from the massive infrastructure projects.