The role of green finance and innovation in advancing environmental sustainability in South America

ABSTRACTIn recent decades, rapid development in emerging economies, particularly within the BRICS bloc, has intensified climate challenges, threatening environmental sustainability. Green energy, technological innovation, and carbon pricing strategies have emerged as key tools for mitigating these impacts while promoting green economic growth, aligning with international goals such as the 2030 SDGs and the pledge for carbon neutrality by 2060. However, balancing socio‐economic growth with environmental sustainability remains a significant challenge for BRICS countries. This study investigates the impact of green energy, green innovation, technological diffusion, green finance, economic growth, and natural resource rents on CO2 emissions in BRICS economies from 1995 to 2022. The research employs advanced panel data techniques, specifically the Augmented Mean Group (AMG) and Common Correlated Effects Mean Group (CCEMG) models, to account for cross‐sectional dependence and heterogeneity. The empirical results show that green energy, green innovation, and green finance all have a significant negative impact on CO2 emissions, contributing to emission reductions. In contrast, economic growth and technological diffusion are positively associated with CO2 emissions, indicating that higher economic growth and technological diffusion lead to an increase in emissions. The Dumitrescu and Hurlin panel causality tests reveal bidirectional causal relationships, suggesting that not only do these factors influence emissions, but emissions also impact the advancement of green technologies and economic growth. Based on these findings, the study recommends policy actions to support SDG targets, particularly SDG 7, SDG 8, SDG 9, and SDG 13, through the promotion of green energy, innovation, R&D, and circular economy practices.

Do green finance and innovation matter for environmental protection? A case of OECD economies

One possible way to achieve sustainable economic growth is by limiting carbon dioxide (CO2) emissions. The developing countries, in particular, which significantly contribute to global carbon dioxide emissions, need a paradigm shift towards sustainable production and consumption to achieve economic growth while ensuring environmental sustainability. This study thus analyzes the role of green technology innovation, green finance, renewable energy use, institutional quality, and agricultural value added in attaining environmental sustainability by abating CO2 emissions for 25 select developing countries from 1998 to 2019. This study uses the Driscoll‐Kraay and two‐step SGMM estimators to assess the impact of independent variables on the response variable, acknowledging the endogeneity problem in the model. The empirical findings reveal that green finance, green technology innovation, and institutional quality induce CO2 emissions, whereas agricultural value‐added and renewable energy use are observed to have detrimental effects on CO2 emissions. Moreover, the moderation effect of green technology innovation and institutional quality with green finance is observed to have a weak and insignificant impact on CO2 emissions. The study thus recommends that developing countries enforce policies to promote investments and innovation in the clean energy sector to attain sustainable development goals by mitigating carbon emissions.

Combining the role of green finance and environmental sustainability on green economic growth: Evidence from G-20 economies

The member states of developing-8 orD-8 organization for economic cooperation have been facing various environmental hitches posing different challenges. The interlinkages between information and communication technologies (ICT), natural resources, green finance, green innovation and environmental footprint are turning to be pivotal in this regard. This study examines the interrelationships among, natural resource rents (NRR), green technology innovation (GI), economic growth (EG), green finance (GF), and ecological footprints (EFP) in the D-8 member countries using data for the period 1995-2024. After checking data for the cross-sectional dependence (CSD), a cross-sectional augmented autoregressive distributive lag (CS-ARDL) approach is employed for the estimation. The empirical results show that natural resources increase ecological footprint. Green finance, information and communication technologies, green innovations, and technological advancements all contribute to reducing ecological footprints. The Dumitrescu and Hurlin (2012) causality testing show a one-way causal relationship between economic growth, green finance, ecological footprints, and information and communication technologies. This study incorporates new knowledge from the D-8 nations in the existing body of knowledge related to causes of environmental pollution. In addition, this study provides a benchmark by which policymakers and government institutions can evaluate their investments in the ICT, green finance, and environment-friendly technology to mitigate environmental emissions.

Green finance, innovation, and resource efficiency have gained significant traction recently, particularly in resource-rich countries. This study investigates the role of green finance and innovation in resource efficiency with the mediating lens of environmental regulations and market rules. The study employs a structural equation model on a panel of 15 resource-rich countries from 1995 to 2023. The findings illustrate a complicated interplay between the variables. First, the findings show that green financing positively and negatively affects resource efficiency. In contrast, green innovation constantly improves resource efficiency. Market rules have a favorable impact on resource efficiency. Environmental laws, however, hurt resource efficiency. Furthermore, the study reveals that green financing favors market regulations, implying that financial expenditures in green initiatives might strengthen regulatory frameworks that promote market efficiency. In contrast, green finance harms environmental rules, and green innovation harms both market and environmental regulations. In addition, we divided the sample into developed and developing nations and offered a sub-group analysis to take into consideration the variations in the degree of national development and green advances to further improve the analysis. Overall, the study emphasizes the multifaceted role of green finance and innovation in increasing resource efficiency within regulatory frameworks. These findings are critical for policymakers and stakeholders in resource-rich countries seeking to reconcile economic growth with sustainable development.

IntroductionThis paper analyzes the influence of green finance innovation on the green innovation ability of Shanxi Huangtupo Coal Industry Group Co., Ltd.MethodsBy constructing a fixed-effect model. This study uses the number of green patent applications by enterprises as indicator to measure green innovation, with the green finance development index as a key explanatory variable, while controlling for other factors such as asset-liability ratio and listing time.ResultsThe results show that there is a significant positive correlation between green finance innovation and the green innovation of enterprises, indicating that the development of green finance has effectively promoted the green technology innovation in enterprises, which helps to achieve carbon neutrality.DiscussionThe study provides a reference for policymakers to promote the development of lowcarbon economy through financial policies. Linking green finance innovation with the green innovation capabilities of specific high emission sector enterprises provides new insights into the role of green finance in promoting enterprise carbon neutrality.

In the carbon neutrality strategy, understanding the effects of green finance on green technology innovation is conductive to promoting the green transformation of the economy. Based on the micro-level and provincial panel data of Shanghai and Shenzhen A-share listed companies from 2012 to 2019, this study explored the impact of green financial development on the enterprises’ green technology innovation. Both mediating effect and moderating effect models were employed to determine the impact of green finance on green technological innovation. It was found that green finance significantly improved the enterprises’ green technology innovation, despite sufficient incentives for “quantity” and relatively insufficient motivation for “quality”. The mechanistic tests demonstrated that the green finance could encourage enterprises to improve green technology innovation by alleviating corporate financing constraints. The green innovation effect of green finance was gradually increased when the regional intellectual property protection was improved. The heterogeneity test indicated that the incentive effect of green financial development on green technology innovation was more evident in state-owned enterprises, enterprises with good internal control quality, and enterprises in the growth period. If only enterprises in the recession stage received green financial support, a “green innovation bubble” might occur. The research conclusions enrich the theories on the driving factors of enterprise green innovation and provide empirical evidence for enhancing the competitiveness of enterprise green innovation and achieving carbon neutrality.

This article uses the “Green Finance Reform and Innovation Pilot Zone” promulgated in 2017 as an example to construct a quasi-natural experiment and uses the difference-in-difference method to test the impact of the implementation of the “Green Finance Reform and Innovation Pilot Zone” on the green innovation activities. It was found that the policy promotes the quantity and quality of corporate green innovation. The mechanism test showed that policy promotes the R&D investment and expands the credit scale. The study further found that green finance policies enhance the green innovation of enterprises as government environmental regulation is strengthened. Finally, green innovation by state-owned enterprises is more strongly promoted in the pilot green finance reform and innovation zones, and green innovation by enterprises in non-polluting sectors is more sensitive to the policy, with a heterogeneous pattern of policy effects in eastern and non-eastern China. Therefore, green finance policies should be promoted to achieve an effective combination of financial resource allocation and corporate green innovation to promote the construction of ecological civilization.

Green finance and energy natural resources nexus with economic performance: A novel evidence from China

Green innovation emerges as a pivotal breakthrough for expediting the shift towards a sustainable green development model. Green Finance Reform and Innovation Pilot Zones (GFRIPZ), functioning as a comprehensive policy initiative, harness diverse policy instruments to catalyse the green transformation of enterprises. Constructing a tripartite game model (government, banks, enterprises), this study sheds light on the green evolution of enterprises’ strategic behaviour with the incentive of GFRIPZ, and explains the underlying mechanism of green finance for green innovation. Data of Chinese listed companies (2007–2019) are used to test the mechanism and specific effect of green finance with the difference-in-differences method. The findings reveal that green finance effectively promotes enterprises’ adoption of green innovation strategies. The mechanism appears to be that green finance promotes green innovation by increasing environmental protection investment, reducing financing constraints and improving total factor productivity. Meanwhile, enterprise digitization and industry-finance integration play a positive synergistic role in connecting green finance and green innovation. Besides, the promoting effect of green finance on green innovation in large, non-polluting and mature enterprises is more prominent relative to that in others. This study elucidates the micro-mechanisms underlying green finance system design that foster green innovation and achieve high-quality economic development.

Green finance and green innovation: Theoretical analysis based on game theory and empirical evidence from China

Despite the availability of substantial empirical evidence on the influence of green finance (GF) or green innovation (GI) on environmental performance (EP), only a few studies have attempted to examine the link between Fintech adoption (FA), GF, GI, and EP during the COVID-19 pandemic. Thus, by applying the structural equation modeling (SEM) approach to the data obtained from 302 banking staff in a developing economy (in this case, Bangladesh), this research work empirically examines the association between FA, GF, and EP, alongside the mediating role of GI. The empirical results indicated that FA significantly impacts GF, GI, and EP and that GF has a significant positive influence on GI and EP. Also, GI was observed to positively influence EP and partially mediate the relationship between FA, GF, and EP of banks. As one of the earliest studies to empirically investigate the relationships among these variables, these findings add to the existing scholarship on technological innovation, green finance, and environmental sustainability in the context of financial institutions in an emerging market during the pandemic. Moreover, the study demonstrates the significance of FA, GF, and GI in improving the EP of financial institutions and, ultimately, in ensuring the sustainable economic development of the country.

Influence mechanism between green finance and green innovation: Exploring regional policy intervention effects in China

This study examines the economic impact of fintech adaptation on sustainability performance in the Indonesian banking sector, with green finance and green innovation as mediating variables. A quantitative research approach was employed, utilizing secondary data from six Indonesian banks listed on the Indonesia Stock Exchange (IDX) from 2019 to 2023. Path analysis was applied to evaluate to assess relationships among fintech adaptation, green finance, green innovation, and sustainability performance. The findings reveal that fintech adaptation significantly influences green finance but has a limited impact on green innovation and direct sustainability performance. Additionally, green finance and green innovation do not significantly mediate the relationship between fintech adaptation and sustainability performance. These results highlight the challenges of integrating fintech into sustainable banking initiatives in emerging markets. The study underscores the need for enhanced regulatory frameworks, strategic fintech adoption, and increased collaboration among financial institutions to drive sustainability efforts. Future research should explore additional factors influencing sustainability performance in banking.