Using green credit to guide the direction of funds is very important for improving the current social environment and enhancing economic development quality. Through its differential pricing features, evidence suggests that green credit has limited the flow of capital to highly polluting and high emission ("two high") industries, allowing more capital to flow to green industries and improving the quality of environmental and economic development. The article combines green credit and the performance of listed banks in a theoretical and empirical study to explore the intrinsic correlation between them and to find the intrinsic motivation for banks to implement green credit, which effectively improves social welfare and promotes sustainable economic development. The article first reviews the current status of green credit research and theories related to green development in China and other countries, and then analyses the dynamics of green credit development, value creation, as well as the mechanisms by which green credit improves the financial performance of listed banks. Finally, the article explores the impact of green credit on the financial performance of listed banks through empirical analysis. Here we have established a panel data model to sort out and analyze the relevant data of 19 listed Banks in China from 2008 to 2017 to study the impact of green credit on listed banks' financial performance. This study has shown that the green credit ratio, as an indicator of the amount of green credit implemented by listed banks, will positively impact financial performance. But the impact of the current period and the one-period lag is more significant, while the effect of the two-period lag is not significant. The second major finding was that when green reputation is used as an indicator to measure the quality of green credit implementation of listed banks, listed banks' financial performance can be significantly improved. Besides, this study has also found that green credit implementation generally has different impacts on different types of banks.