Research On The Impact Of Green Finance On The Profitability Of My Country’s Commercial Banks

Since the 18 th National Congress of the Communist Party of China,my country has adhered to the path of green development and actively promoted the development of green finance.In the "14th Five-Year Plan" released in 2020,it was mentioned again that "accelerating the promotion of green and low-carbon development","strengthening the legal and policy guarantees for green development,and developing green finance".As an important part of the modern financial system,commercial banks must shoulder the heavy responsibility of green development.The profitability of commercial banks is the basis for their various businesses.Whether the development of green finance can improve the profitability of banks is crucial to the high-quality development of green finance in my country.This article first elaborates the research background and significance,and sorts out the relevant research on green finance and the impact of green finance on the profitability of commercial banks,and establishes the research ideas of the thesis.Secondly,it explains related concepts and theoretical foundations,and introduces my country’s green financial tools and their development status.Then,it analyzes the impact mechanism of green finance on the profitability of commercial banks in two ways: direct impact and indirect impact.Finally,we selected data from 18 commercial banks in my country to construct an evaluation index system for the development of green finance of commercial banks,and calculated the comprehensive scores of commercial banks through the principal component analysis method.It was found that the overall scores of the development of green finance showed an upward trend.The score is higher than other types of banks.Using a panel model to empirically study the impact of green finance on the profitability of commercial banks,the study concludes:(1)The development level of green finance of commercial banks is positively correlated with the return on total assets,indicating that the implementation of green finance by commercial banks is beneficial to improving their profitability.(2)Green finance has a differentiated impact on the profitability of different types of commercial banks,that is,green finance has a significant promoting effect on joint-stock banks,but has no obvious impact on other types of banks.(3)Commercial banks’ implementation of green finance business can obtain good comments from the public,that is,it can bring green reputation,and verify that there is an intermediary effect of green reputation in the impact of green finance on the profitability of commercial banks.Combining the previous research,put forward several countermeasures and suggestions to promote the development of green finance in my country from the two levels of the government and banks,including improving green finance laws and policies,strengthening the main body’s environmental information disclosure,innovating various green financial products and services,and accelerating the construction of majors Talent team,etc.