Daily Times

Are leaders born or made? This is the age old question being debated upon by management researchers for many decades. With the ‘Green Consumer Day’ being celebrated on the 28thof September, my mind wonders along the same crossroads but across the paths of green or eco-conscious consumerism. Since Pakistan has also recently jumped on the global green bandwagon, I wonder if Green Consumers are born or made. It meanswhether being ecologically conscious in one’s consumption behavior is a biological predisposition or a state of mind developed through the amalgam of various extrinsic and intrinsic factors.Considering green consumption behavior as a biological characteristic can resultantly invalidate almost all of the green management theories and researches. If it is a predetermined human behavior, it means that it cannot be developed among consumers and therefore is not a geographically generalizable human characteristic. Based on this reasoning, let us concede that green consumerism can be developed among consumers and human behavior can be modified towards eco-consciousness.

The theory of operant conditioning teaches us how to modify human behavior through the concept of punishment and rewards. The provision of reward for a specific behavior will enforce that behavior within an individual. Similarly, punishment or removal of a reward will diminish unwanted behavioral occurrences among individuals. The effectiveness of this theory of learning is also apparent from the use of reward and punishment to develop and reinforce good behavior in Islam. Muslims are directed to behave in an environmentally conscious manner in all aspects of their lives. The Government of Pakistan has also applied the theory of operant conditioning in developing the culture of tax payment among citizens. The provisions of tax incentives for tax filers and increased taxes for non-tax filers is an example of positive and negative reinforcement for behavioral modification.The Government’s policy to reduce the use of single-use polyethylene (PE) plastic bags in Pakistan is also a step towards green behavior development among consumers. The success of these initiatives proves the potential of green consumerism in Pakistan when efficient reward or punishment mechanisms are implemented.

The banking industry cannot expand the green financing portfolio unless there is an active and growing demand for green products and services by the consumers

The various Green Banking initiatives by the State Bank of Pakistan (SBP) can play an important role in the development of Green Consumers. SBP have launched the Financing Scheme for Renewable Energy to positively reinforce renewable energy usage through lower interest rates and easier repayment terms.The boost in digital banking is an important component of Green Banking adoption. Since digitalization of financial services reduces the various adverse environmental impacts produced as a result of branch banking operations. The ‘Roshan Digital Account’ for overseas Pakistanis is also a big step towards digitalization or greening of Pakistan’s economy since it allows consumers to open a bank account digitally /online from overseas.

In view of Pakistan’s natural environmental degeneration and resource degradation the country is in dire need of green economic development. The point to ponder here is that effective implementation of any economic paradigm requires the creation of a balance between supply and demand. Various Green Banking initiatives being taken by the banking sector has set a pace for the development of the supply side of our country’s green economy. But supply without demand cannot sustain an economic system. Based on the earlier discussion, green consumption behavior can be encouraged among people through provision of various financial incentives on green purchases or green investments. Banks can offer lower interest rates for financing of green products such as hybrid cars or green house mortgages. Green Bonds can be issued for financing projects with environmental benefits, such as renewable energy, low-carbon transport and green buildings. Consumers can also be provided with various non-financial incentives such as the chance to donate to an environmental cause through using green credit cards or opening green banking accounts.

On the Green Consumer day, it must be realized that consumers have a responsibility for the development of our country’s green economy. The banking industry cannot expand the green financing portfolio unless there is an active and growing demand for green products and services by the consumers. Just like consumers are the backbone of an economy; green consumers are the backbone of a green economy. Development of Green Consumers first and foremost requires awareness building among the consumers. Banks can provide information to customersby establishing separate Green Banking counters regarding various Green Banking products or services. The Green Consumer Day should be celebrated on national levels through various platforms for the development of eco-consciousness among Pakistani consumers. Together we can make thefuture of our nation truly ‘Clean and Green’.

Syed Asim Ali Bukhari is a Senior Manager – Green Banking Officer in Bank AL Habib Limited Pakistan. He is also doing his PhD in Green Banking from Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia.