Year: 2025 | Month: November | Volume: 12 | Issue: 11 | Pages: 304-309
DOI: https://doi.org/10.52403/ijrr.20251133
Analysis of Green Financing, ESG Performance, And Financial Performance on Banking Financial Stability in Indonesia
Wahyu Indah Sari1, Dewi Mahrani Rangkuty2, Jessi Charina Sembiring3
1,2Department of Development Economics, 3Department of Finance and Banking
1,2Faculty of Social Sciences, Universitas Pembanguna Panca Budi, Medan, Indonesia.
3Faculty of Economics, Universitas Prima Indonesia, Medan, Indonesia
Corresponding Author: Dewi Mahrani Rangkuty
ABSTRACT
This study aims to analyze the influence of green financing, ESG performance, and financial performance on banking financial stability in Indonesia for the 2015–2024 period. Annual secondary data is obtained from OJK, Bank Indonesia, and national commercial bank sustainability reports. The analysis model uses multiple linear regression (OLS) with the dependent variable Return on Assets (ROA) as a proxy for financial stability. The results show that green financing and CAR have a positive effect on ROA, while ESG performance and NPLs have a significant negative effect. An R² value of 0.903 indicates that the model is able to explain 90.3% variation in the bank's financial stability. These findings confirm that green finance and sustainable governance strengthen the resilience of the national financial system.
Keywords: Green Financing, ESG Performance, Financial Performance, Financial Stability, ROA.
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