Research On The Influence Of Green Finance On The Profitability Of Commercial Banks

Since the reform and opening-up,China’s economy has entered the fast track of development,with remarkable achievements made,and has completed the transformation from quantitative expansion to qualitative leap.However,the development mode of extensive economy has caused serious negative impact on China’s economic development.To solve this difficult issue,the development of green finance has become an inevitable choice,which is of great significance for improving ecology and environment,accelerating the green transformation of development mode,and promoting the harmonious coexistence between man and nature.Green finance is an important component of ecological civilization construction.The financial industrial has great potential in supporting the green and low-carbon development.At the same time,green development also brings huge opportunities for the development of financial sector.As the core of modern economy,commercial banks play an important role in promoting the shift towards a green economy and optimizing the allocation of resources.With the constant deepening of the structural transformation of economy and the reform of financial system in China,commercial banks should seize the historical opportunity,adjust the direction of development and actively carry out green finance business.In this context,the Chinese government attaches great importance to green finance and has introduced a series of institutional measures to guide commercial banks to conduct green finance business.In terms of development,China’s green financial system has been initially established and has become a national strategy;there has been a constant increase in the scale of green credit,the issuance of green bonds has continued to grow significantly,achieving a win-win situation for both economic and social benefits.However,green finance still has some shortcomings in China.Therefore,it is necessary to research the development status and constraints of green finance in Chinese commercial banks,which is of important practical significance for implementing green finance-related policies,preventing and defusing financial risks,and improving the profitability of commercial banks.This paper first discusses the definition of green finance.Starting from this theory,the paper introduces the theoretical basis and main tools of green finance.Second,this paper expounds the development status of green finance,introduces the practice of the green finance concept in some commercial banks,and points out the dilemma of green finance development in China.Third,after analyzing the influence of green finance on the profitability of commercial banks,this paper points out the influence of green finance on the profitability of commercial banks from two aspects,and lists the manifestations of such an influence on the profitability of commercial banks from four aspects.Fourth,based on the actual situation and a combination of theory and practice,after selecting the historical data of 30 domestic commercial banks in 2007-2021,this paper researches the net effect of the influence of implementation of green credit policy on the performance of commercial banks by taking the Green Credit Guidelines issued by China Banking Regulatory Commission in 2012 as the standard and using the difference-in-differences method.The empirical results show that,first,the implementation of green credit policy has a significant impact on improving the performance level of state-owned banks,and the impact is positive.At the early stage of the policy implementation,the six major stateowned banks took the lead in responding to the policy,conducted pilot experiments,and played a leading and exemplary role.Second,the implementation of green credit policy can improve the performance of commercial banks to a certain extent.To implement green credit policy enables them to avoid environmental risks and improve asset quality,demonstrating a strong momentum for development.Therefore,the implementation of green credit policy can improve the economic benefits of commercial banks.Finally,according to the empirical results,this paper made a comprehensive summary and put forward countermeasures and recommendations for commercial banks to carry out green finance business and realize sustainable development of environment and economy from two aspects: government and commercial banks.