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Purpose – This paper aims to investigate the impact of climate risk funds (CRF), as a moderator variable, on the association between green banking investment (GBI) and financial performance. Design/Methodology/Approach – The research has used secondary data from banks’ audited annual reports. The data has been analysed using SPSS version 26 for validating the results. Findings – The findings generated from the data indicate that there is a significant relationship between GBI and financial performance. In addition to that, this relation becomes positively more assertive in the presence of CRF. Originality – This study is one of the first attempts to investigate the causality relationships and the moderating impact of CRF on the relationship between GBI and financial performance in the context of a developing country. Practical Implications – The findings indicate that the demand for green business has increased in developing countries, which facilitates the higher demand for GBI; this has an impact on EPS, which shows the shareholders’ concern towards environmentally friendly banking practices.