The Impact of Green Banking on Indonesia Stock Exchange-Listed Banks' Financial Performance from 2020 to 2024

Siti Hafizd Nur Syahrani Az’zahra; Rosmini Ramli

doi:10.55927/eajmr.v5i2.5

Authors

Siti Hafizd Nur Syahrani Az’zahra Universitas Jenderal Achmad Yani
Rosmini Ramli Universitas Jenderal Achmad Yani

DOI:

https://doi.org/10.55927/eajmr.v5i2.5

Keywords:

Green Banking, Financial Performance, ROA, ROE, Banking

Abstract

This study aims to analyze the influence of Green Banking on the financial performance of banks listed on the Indonesia Stock Exchange during the 2020-2024 period using quantitative methods with descriptive and causal approaches. The research sample included 39 banks selected through non-probability sampling techniques with a purposive sampling approach. Data analysis was carried out using the Structural Equation Model (SEM) with Partial Least Square (PLS) through the SmartPLS 4 application. The results of the study prove that Green Banking has a significant positive effect on financial performance as measured through Return on Assets (ROA) and Return on Equity (ROE). Banks that implement Green Banking practices show increased operational efficiency, better reputation, and more effective risk management. These findings indicate that the application of environmental sustainability principles in banking operations not only contributes positively to the environment, but also produces financial performance and makes Green Banking a profitable and sustainable business strategy for the banking industry in Indonesia..

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