Perceived Fossil Fuel Financing Practices and Environmental Sustainability Outcomes Among Bank Employees in Assam: The Moderating Role of Institutional Quality

This study examines the relationship between Perceived Fossil Fuel Financing Practices (PFFP) and Perceived Environmental Sustainability Outcomes (PESO) among private-sector bank employees in Assam, India, while assessing the direct and moderating role of Perceived Institutional Quality (PIQ). A quantitative, cross-sectional research design was employed using data collected from 100 private-sector bank employees through a structured questionnaire. Climate Risk Awareness (CRA) and Organisational Factors (OF) were incorporated as control variables. The hypothesised relationships were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The measurement model demonstrated satisfactory reliability, convergent validity, and discriminant validity. The structural model explained 45.8% of the variance in PESO. The results revealed that PFFP had a significant negative association with PESO (β = −0.298, p < 0.001), supporting H1. In contrast, PIQ showed a positive but statistically non-significant association with PESO (β = 0.180, p = 0.134), while the interaction between PFFP and PIQ was also non-significant (β = 0.080, p = 0.276); hence, H2 and H3 were not supported. CRA and OF exhibited significant positive associations with PESO. The study contributes to sustainable-banking literature by shifting attention from predominantly studied green banking practices toward employees’ perceptions of carbon-intensive financing and by providing evidence from the comparatively underexplored Northeast Indian banking context. The findings highlight the relevance of financing practices and internal organisational conditions in shaping perceived environmental sustainability outcomes.