The impact of green finance on profitability with credit risk as an intervening variable
DOI:
https://doi.org/10.35335/ijafibs.v11i3.170Keywords:
Credit Risk, Green Finance, ProfitabilityAbstract
Sustainable Development Goals (SDGs) have become a global concern and have touched various industrial sectors. Through the application of green finance in the financial industry, green credit is provided by banks to support the sustainability of business projects based on environmental sustainability as determined in the Sustainability in the Sustainable Business Activity Category (KKUB) by OJK. On the other hand, as profit-oriented companies, banks need to consider how it impacts credit risk and banking profitability. Using credit risk as an intervening variable, this study seeks to establish the correlation between green finance and profitability of banks listed on the Indonesia Stock Exchange. This research uses the path analysis method and a quantitative study using the financial statements of banks that apply green finance for 2018-2022. The result shows that green lending (green finance) positively affects credit risk and negatively impacts bank profitability. Other result shows that credit risk can mediate the development of green lending on profitability.
References
Abidi, R., & Sastradipraja, U. (2023). EFFECT OF LDR, CAR, BOPO AND INFLATION ON NPL. Jurnal Ekonomi, 12(01), 848–863. http://ejournal.seaninstitute.or.id/index.php/Ekonomi
Anggraini, D., Aryani, D., & Prasetyo, I. (2020). Analisis Implementasi Green Banking dan Kinerja Keuangan terhadap Profitabilitas Bank di Indonesia (2016-2019). Jurnal Bisnis, Manajemen Dan Informatika, 17(2), 141–161.
Anggraini, I., Arida, R., & Harianto, K. (2022). Pengaruh Kecukupan Modal, Dana Pihak Ketiga dan Risiko Kredit terhadap Profitabilitas (Studi Kasus pada Perusahaan Perbankan yang terdaftar di Indeks LQ-45 periode 2019-2020). Jurnal Publikasi Sistem Informasi Dan Manajemen Bisnis (JUPSIM), 1, 53–65.
Chang, X. (2021). Research on the Influence of Green Credit on the Profitability of Chinese Commercial Banks. In Proceeding of the 5th International Conference on Informatization in Education, Management and Business, Suzhou, China, 5–6. https://doi.org/10.25236/iemb.2021.027
Cui, Y., Geobey, S., Weber, O., & Lin, H. (2018). The impact of green lending on credit risk in China. Sustainability (Switzerland), 10(6). https://doi.org/10.3390/su10062008
Danye, H. (2020). Research on the impact of green credit on profitability of commercial banks in China. E3S Web of Conferences, 214. https://doi.org/10.1051/e3sconf/202021403008
Desy Purnama, E., Lumbantobing, R., Bisnis, E., & Management, M. (2023). Enrichment: Journal of Management The effect of non-performance loan (npl) mediation and interest rate moderation on the effect of capital adequacy ratio (car) and bopo on return on assets (roa) in consumer finance companies listed on the idx for 2019-2021. In Enrichment: Journal of Management (Vol. 12, Issue 6).
Dewi, I., & Wartana, I. (2021). Pengaruh Risiko Kredit, Risiko Tingkat Bunga dan Risiko Likuiditas terhadap Profitabilitas Bank BUMN Indonesia Periode 2016-2020. Journal Research of Management (JARMA, 3(1), 27–35.
Giavinny, G., & Ugut, G. S. (2022). Pengaruh Kualitas Penerapan Good Corporate Governance dan Risiko Kredit terhadap Profitabilitas Perbankan Asing di Indonesia. Journal of Education, Humaniora and Social Sciences (JEHSS), 4(4), 2212–2219. https://doi.org/10.34007/jehss.v4i4.1036
Hasanah, N., & Hariyono, S. (2022). Analisis Implementasi Green Financing Dan Kinerja Keuangan Terhadap Profitabilitas Perbankan Umum Di Indonesia. Jurnal EKOBIS: Ekonomi, Bisnis & Manajemen, 12(1), 149–157. http://ejournal.stiemj.ac.id/index.php/ekobis
Hatmadi, F. A., & Trihadmini, N. (2022). Pengaruh Green Financing Dan Faktor Spesifik Bank Terhadap Risiko Perbankan di Indonesia. J-REMA, 1(3), 13.
Iklin, M. (2023). Pengaruh CAR, NPL, BOPO Dan LDR terhadap Retrun on Assets pada Bank Pembangunan Daerah: Al-Kharaj: Jurnal Ekonomi, Keuangan & Bisnis Syariah, 6(1), 360–379. https://doi.org/10.47467/alkharaj.v6i1.2689
Li, R., & Chen, Y. (2022). The influence of a green credit policy on the transformation and upgrading of heavily polluting enterprises: A diversification perspective. Economic Analysis and Policy, 74, 539–552.
Liebman, A., Reynolds, A., Robertson, D., Nolan, S., Argyriou, M., & Sargent, B. (2019). Green Finance in Indonesia. In Handbook of Green Finance (pp. 1–30). Springer Singapore. https://doi.org/10.1007/978-981-10-8710-3_5-1
Malini, H. (2021). Islamic Bank Sustainability in Indonesia: Value and Financial Performance Based on Social Responsibility and Green Finance. Cepalo, 5(2), 93–106. https://doi.org/10.25041/cepalo.v5no2.2360
Mustika, S. N., Kristianingsih, K., Tripuspitorini, F. A., & Djuwarsa, T. (2023). Analisis Pengaruh Penerapan Green Banking dan Efisiensi Biaya Operasional terhadap Profitabilitas Bank Umum Syariah di Indonesia. Journal of Applied Islamic Economics and Finance, 3(2), 436–443. https://doi.org/10.35313/jaief.v3i2.3861
Nurhalida, S., & Sofwan. (2023). Peran Enviromental, Social and Governance (ESG) terhadap Profitabilitas di Sektor Perbankan Indonesia. Contemporary Studies in Economic, Finance and Banking, 2(1), 13–25.
Otoritas Jasa Keuangan. (2021). Roadmap Keuangan Berkelanjutan Tahap II (2021-2025), The Future of Finance.
Poniman, E., & Saragih, J. R. (2022). Pengaruh Loan to Deposit Ratio, Kredit Macet dan Capital Adequacy Ratio Terhadap Profitabilitas Pada Perusahaan Perbankan yang terdaftar di Bursa Efek Indonesia Periode 2018-2020. Owner, 6(1), 1083–1092. https://doi.org/10.33395/owner.v6i1.698
Rafinur, A., Arditha, A., & Rusmianto, R. (2023). Pengaruh CAR, LDR, BOPO dan NPL terhadap ROA pada Sektor Perbankan di Bursa Efek Indonesia Periode 2018-2019. Jurnal Ilmiah ESAI, 17(1), 40–56. https://doi.org/10.25181/esai.v17i1.2630
Ranning, Z. (2022). Research on the Impact of Green Credit on the Profitability of Commercial Banks. In Proceeding of the 6th International Conference on Education, Management and Social Science, Suzhou, China, 25–26.
Roelfsema, M., den Elzen, M., Höhne, N., Hof, A. F., Braun, N., Fekete, H., Böttcher, H., Brandsma, R., & Larkin, J. (2014). Are major economies on track to achieve their pledges for 2020? An assessment of domestic climate and energy policies. Energy Policy, 67, 781–796.
Rohmadhoni, M. (2023). Pengaruh Risiko Likuiditas dan Risiko Kredit terhadap Profitabilitas Pada Bank Umum Swasta Nasional Devisa yang Terdaftar di BEI Periode 2017-2021. Jurnal Ilmiah Akuntansi Keuangan Dan Bisnis, 3(2), 132–147.
Setyaningsih, A., & Ernitawati, Y. (2023). Pengaruh Biaya Operasional Pendapatan Operasional (BOPO), Loan to Deposit Rasio (LDR) dan Net Interest Margin (NIM) terhadap Return on Asset (ROA) pada Perusahaan Perbankan yang terdaftar di Bursa Efek Indonesia. 10(2), 696–715.
Sharma, M., & Choubey, A. (2022). Green banking initiatives: a qualitative study on Indian banking sector. Environment, Development and Sustainability, 24(1), 293–319. https://doi.org/10.1007/s10668-021-01426-9
Sobel, M. E. (1982). Asymptotic Confidence Intervals for Indirect Effects in Structural Equation Models. Sociological Methodology, 13, 290–312. https://doi.org/10.2307/270723
Sugiyono, S. (2010). Metode penelitian kuantitatif dan kualitatif dan R&D. Alfabeta Bandung.
Suhartono, S., Halimah, A., Kuspriyono, T., Hakim, L., & Yanti, V. A. (2023). Pengaruh resiko kredit terhadap profitabilitas bank (Studi pada Bank Mandiri, Bank BNI dan Bank BRI). JAE (JURNAL AKUNTANSI DAN EKONOMI), 8(1), 20–30.
Tentiyo, S. (2023). Green Finance. JIBF MADINA: Journal Islamic Banking and Finance Madina, 4(1), 78–96.
Wahyuningsih, S. (2021). Analisis Tingkat Resiko Kredit Pada Koperasi Credit Union Pesada. Warta Dharmawangsa, 15(2), 247–257.
Wijaya & Leon. (2022). Pengaruh Green Finance, Volatility, Risk dan Regulation Terhadap Investment decisions Pasca Covid-19 di Indonesia pasca covid.
Xi, B., Wang, Y., & Yang, M. (2022). Green credit, green reputation, and corporate financial performance: Evidence from China. Environmental Science and Pollution Research, 29, 2401–2419.
Yasin, M., Wendy, & Giriati. (2023). Pengaruh Tingkat Risiko Kredit, Efisiensi dan Pengungkapan Laporan Berkelanjutan Terhadap Nilai Perusahaan Perbankan di Indonesia Dengan Profitabilitas Sebagai Variabel Mediasi. SEIKO: Journal of Management & Business, 6(2), 336–348.
Zhou, X. Y., Caldecott, B., Hoepner, A. G. F., & Wang, Y. (2022). Bank green lending and credit risk: an empirical analysis of China’s Green Credit Policy. Business Strategy and the Environment, 31(4), 1623–1640. https://doi.org/10.1002/bse.2973
Zikri, S. A., Tamara, D. A. D., Mai, M. U., & Nurdin, A. A. (2023). Analisis Pengaruh CAR, NPF, BOPO, dan FDR terhadap ROA (Studi Kasus PT. Bank Muamalat Indonesia Tbk.). Journal of Applied Islamic Economics and Finance, 3(2), 286–301. https://doi.org/10.35313/jaief.v3i2.3756
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 International Journal of Applied Finance and Business Studies
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
