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The Impact of Green Banking Implementation on Banking Sector Profitability for the 2019-2023 Period

Diyana Nabilla, Vietha Devia

Abstract


This study aims to analyze the impact of implementing the green banking system on the profitability of the banking sector in Indonesia during the period 2019–2023. Green banking is proxied by green coin ratings, which consist of six indicators: carbon emissions, green rewards, green building, reuse/recycle/refurbish, paperwork or paperless, and green investment. This study uses a quantitative method and panel data regression analysis on seven banking sectors listed on the Indonesia Stock Exchange (IDX) that consistently report their sustainability reports. The results of this study indicate that the implementation of green banking simultaneously has a significant effect on banking profitability; however, partially, only carbon emissions have a significant effect on profitability. This is due to the low level of public awareness regarding sustainability efforts and the high cost of environmentally friendly technology. This study is expected to motivate the banking sector to increase green banking efforts to become more profitable in the future.

Keywords


Green Banking; Green Coin Ratings; Profitability

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DOI: 10.33751/jhss.v9i3.11503

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