The Effect of Green Finance and Corporate Social Responsibility on Profitability with Capital Adequacy Ratio as A Moderating Variable

Evi Safitri; Helma Malini; Ana Fitriana; Wendy; Anggraini Syahputri

doi:10.61987/jemr.v5i3.2039

Authors

Evi Safitri Universitas Tanjungpura
Helma Malini Universitas Tanjungpura
Ana Fitriana Universitas Tanjungpura
Wendy Universitas Tanjungpura
Anggraini Syahputri Universitas Tanjungpura

DOI:

https://doi.org/10.61987/jemr.v5i3.2039

Keywords:

Green Finance, Profitability, Capital Adequacy Ratio

Abstract

This study aims to analyze the effect of green finance and corporate social responsibility (CSR) on profitability and to examine the moderating role of the capital adequacy ratio (CAR). This research employs a quantitative approach using panel data regression analysis. The data used are secondary data obtained from the annual financial reports of banking companies over a five-year observation period. The sample consists of 16 banking companies with a total of 80 observations. The analytical model applied in this study is the Common Effect Model (CEM). The results show that green finance has a positive and significant effect on profitability, indicating that sustainable financial practices can enhance financial performance. In contrast, CSR does not have a significant effect on profitability. Furthermore, the moderation analysis reveals that CAR strengthens the relationship between green finance and profitability but does not moderate the relationship between CSR and profitability. These findings imply that the implementation of green finance plays an important role in improving banking profitability, particularly when supported by adequate capital strength. This study contributes to the development of the sustainable finance literature and provides insights for financial institutions in formulating strategic financial policies.

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