The Impact of Sustainable Investment on the Financial Performance of China’s Banking Sector

Abstract

The effect of sustainable investment on the financial performance of China's banking industry is examined in this research study. In this research paper, an attempt has been made to examine the impact of sustainable investment on the financial performance of China’s Banking Sector by using a comprehensive dataset spanning a significant period. In China's banking sector, econometric techniques have been employed to examine the impact of sustainable investing practices on profitability, risk mitigation, and market valuation. The study adds to the expanding body of literature on sustainable financing by offering empirical data on China's economy. The ranking of the Banker's Top 100 Chinese banks for 2023 served as the sample source for this study. The best five commercial banks from the 2018–2022 ranking make up the research sample. The study's findings clearly show that economic scores positively and significantly affect ROA while having little effect on ROE and EPS. The social ratings also do not influence ROA but have a favourable and large impact on EPS and ROE. According to the environmental ratings, there is a slight negative impact on EPS but a slight positive influence on ROA and ROE. The research findings offer important insights for encouraging sustainable growth and responsible financial practices in China's banking industry.

Keywords

• Sustainable, banks, econometric methods, the Chinese economy.