The Effect of Green Banking Activities on Firm Value with Profitability as an Intervening Variable on Digital Service-Based Banks Listed in Asia

Abstract

Green Banking is a business practice integrates the Triple-Bottom-Line (People, Planet, Profit) principles into banking operations and business decisions, to promote sustainability and long-term profitability, thereby increasing the value of the firms. The research aims to investigates the impact of green banking activities on value of the firms with profitability serving as an intervening variable. The study uses green financing distribution [KKUB], cost efficiency [BOPO] as proxies for green banking activities, return on asset [ROA] as a proxy for profitability, and price to book value [PBV] as a proxy for value of the firm. Object of the research focuses on 14 listed digital service-based banks in Asia, comprising 9 Indonesian banks, 1 Vietnamese bank, 1 Philippines bank, 1 Korean bank, and 1 Japanese bank. Multiple linear regression analysis is used to analyze the data. The results indicate that green banking practices influence the profitability of digital service-oriented banks in Asia, but have no impact on the firm's value, even when intervened by profitability.