A Study On The Impact Of Green Credit On The Performance Of Commercial Banks In China

After long-term extensive development,China has faced a great environmental challenge.At present,the concept of low-carbon living and sustainable development has been deepening into life,production,environment and etc.Being the core role in the financial asset allocation in modern society,commercial banks have gradually realized that environmental problem and shortage of corporate social responsibility will increase the risks both in environment and operation.In 2007,three major official departments of the National Environment Protection,the People's Bank of China and China Bank Regulatory Commission put forward a concept of green credit for the first time,indicating that the government has begun to pay attention to the influence of commercial banks on environmental protection.However,more than ten years have passed since the green credit policy carried out and green credit takes unsatisfactory proportion in the commercial bank loan business which shows that commercial banks haven't focus more on it.Commercial bank,as an enterprise,still targets business performance and the attitude and behavior of these banks are determined by impact of developing green credit on business performance.This paper starts from the commercial banks to analyze the relationship between the banks' practice of green credit policy and its business performance.The research contents and results are as follows:This paper first expounds the current situation and existing problems of the development of green credit in China's commercial banks,and then analyzes the influence of green credit on their operating performance through three aspects of theory.After that,by collecting the financial information and green credit data of 16 commercial banks,fixed effects model is constructed and the relationship between green credit and operating performance of 16 A-share listed commercial banks is empirically analyzed.The research shows that firstly,from the proportion of green credit outstanding,we can see some progress of China's green credit career.However,the development level of it is still backward and most commercial banks practice green credit without high enthusiasm.Secondly,it's true that the government focus more on green credit,but problems of imperfect of laws and regulations,lacking of product innovation,shortage of professional talents are still exist.Thirdly,In the short term,the green credit business has brought negative impact on the business performance of commercial banks.The conclusion of this study is also in line with the reality that "most commercial banks are not very enthusiastic in practicing green credit business".However,considering the scarcity of resources,environmental protection is bound to be the general trend,and the road of sustainable development needs to be adhered to.In the medium and long term,as long as the existing problems and obstacles are solved and the cost of implementing green credit bycommercial banks is further reduced,then the green credit business will have a significant positive impact on the business performance of commercial banks.Finally,according to the above analysis results,for the further development of China's green credit business,the corresponding suggestions are put forward from the government,banks and enterprises respectively.The research in this paper clarifies the mechanism of commercial banks' implementation of green credit on their operating performance,and puts forward targeted policy suggestions,which are of great significance for further development of green credit policy,improvement of Eco-investing system and promotion of sustainable social development.