From awareness to action: How attitude and environmental concern shape intentions to adopt green finance initiatives

Abstract

Green finance has gained prominence as a critical mechanism for addressing climate change and promoting sustainability. However, its adoption remains constrained in many developing economies. Grasping behavioral determinants of adoption is crucial in Pakistan, where evolving financial systems intersect with escalating ecological challenges. This study investigates how awareness, perceived benefits, and adoption costs influence intentions to adopt green finance initiatives. It further investigates attitude as a mediator and environmental concern as a moderator. A cross-sectional survey was conducted among Pakistani individuals. Moreover, the data analysis was made by means of structural equation modelling (SEM) to estimate direct, mediating, and moderating relationships. The results demonstrate that awareness and subsidized costs significantly predict adoption intention of such initiatives. However, perceived benefits affect intentions only indirectly through attitudes. Moreover, attitude emerged as a central mediator, reinforcing explanatory value by linking cognitive evaluations to behavioral intentions. Environmental concerns exerted the strongest direct effect on intentions to adopt green finance initiatives. However, the same revealed a selective moderating role, amplifying the impact of perceived benefits while weakening the influence of attitudes. The findings advance the Theory of Planned Behavior (TPB) by incorporating environmental concern, underscoring psychological complexities influencing sustainable financial behavior. The study emphasizes policymakers’ and financial institutions’ roles in fostering adoption through awareness initiatives, financial incentives, and ecological narratives. This study pioneers TPB in Pakistan’s green finance, revealing interactions among psychological, economic, and environmental factors shaping sustainable decisions.