2025, Vol. 8, Issue 2

In light of the escalating environmental and economic challenges facing the world, green finance has emerged as one of the key mechanisms for promoting financial stability and achieving economic recovery, particularly in developing countries. In this context, the present study aimed to investigate the impact of a set of green finance indicators on supporting financial recovery within the Iraqi banking sector, using the return on deposits as a representative indicator of this recovery. The study relied on the analysis of data from eight private commercial banks listed on the Iraq Stock Exchange during the period from 2014 to 2023. The research adopted a descriptive-analytical approach and focused on four main financial indicators representing green finance instruments: return on investment, return on assets, debt coverage ratio, and return on equity, all of which were linked to the return on deposits as an indicator of financial recovery. Data analysis was conducted using EViews software, version 13.

The indicators were analyzed on two levels: a sectoral level by comparing the performance of the banks within a reference year, and a temporal level to monitor changes in the indicators throughout the study period. The results revealed noticeable differences among the banks in terms of activating green finance indicators, with a gradual improvement observed in the financial recovery indicator in recent years, reflecting a growing orientation toward sustainable financing practices. The study concluded that there is a statistically significant relationship between some green finance indicators and the level of financial recovery. It recommended the development of the legislative framework for green finance and the expansion of its instruments within the Iraqi banking sector.