The Impact of Green Credit on the Profitability of Commercial Banks in a Low-Carbon Context

This paper delves into the concept of green credit and its theoretical underpinnings, contending that it exerts a discernible influence on the profitability of commercial banks. Through empirical investigation employing an individual fixed effect model, it seeks to ascertain the precise impact of green credit on the profitability of such banks. Drawing on panel data encompassing 16 commercial banks in China spanning the period from 2011 to 2020, this study undertakes a thorough analysis to gauge the extent to which green credit affects bank profitability. The findings of this analysis not only contribute to a deeper understanding of the relationship between green credit and bank profitability but also inform potential strategies for enhancing the financial performance of commercial banks in the context of environmental responsibility. By synthesizing these insights with a comprehensive analysis of the prevailing circumstances, the paper concludes by offering recommendations aimed at bolstering the profitability of commercial banks, thereby aligning their operations more closely with sustainable principles and environmental objectives.