The Role of Green Finance in Enhancing the Sustainable Performance of Yemeni Banks in the Capital City of Sana’a

Abstract

Amidst political and economic instability, banks in conflict zones must adopt advanced frameworks to preserve institutional longevity. This study analyzes the role of green financing in driving sustainable performance across (six) Yemeni banks in Sana'a. Deploying an empirical methodology, we surveyed (236) banking executives selected through stratified random sampling from a total population of (789). Descriptive findings reveal a high level of green finance practice (78% agreement, M = 5.48) and relatively strong sustainable performance (69% agreement, M = 4.86). Crucially, formal regression highlights a statistically significant but paradoxically weak positive relationship (β = 0.049, R² = 0.002). Green finance accounts for a mere (0.2%) of performance variance, demonstrating that extreme environmental shocks like active warfare, hyperinflation, and severe infrastructural deficits completely dominate institutional outcomes. We conclude that while green initiatives are fundamentally vital, their immediate strategic efficacy is entirely neutralized without protective legislative guidelines, macroeconomic stabilization, and structural support in fragile developing nations.