Purpose This study aims to examine the dynamic connectedness between green finance, socially responsible investments, Islamic investments and gold. It aims to understand how these connections contribute to environmental sustainability through effective management of green investments, particularly during periods of market turbulence. Design/methodology/approach The study uses time-varying parameters vector auto regressions (TVP-VAR) approach based on generalized forecast error variance decomposition (GEVD). This methodology captures the evolving nature of return spillovers and interconnectedness between the assets studied, especially during the COVID-19 pandemic. Findings The findings suggest that the connectedness among the assets vary over time with a notable heave during the pandemic and a decline during the 2015–2016 oil crisis. Shariah-compliant assets, green bonds and clean energy investments, and are identified as net recipients of shocks, whereas gold, Islamic stocks and sustainable investments act as net transmitters of shocks. This distinction in asset behavior highlights their relatively low level of connectedness throughout the time-varying patterns. Practical implications The findings highlight the importance of understanding dynamic return spillovers and connectedness for investors and policymakers. By recognizing patterns such as net pairwise connectedness between various asset pairs, they can develop strategies to improve portfolio diversification and hedging. This approach helps create resilient investment portfolios aligned with sustainability goals. Social implications Investors can apply these insights and enhance their portfolios to achieve diversification by integrating Islamic investments and Sharia-compliant assets. They can construct portfolios that are both well diversified and aligned with Islamic principles. Additionally, the findings provide crucial guidance for improving diversification within Islamic investments. The research is limited by its focus on specific asset classes and the limited period. Originality/value This study contributes to the growing field of sustainable finance by demonstrating how different investment options, including green bonds and Islamic investments, respond to market shocks. It emphasizes their role in optimal portfolio construction, supporting socially responsible investment strategies and advancing environmental sustainability.

Green bonds and corporate environmental performance: The role of third-party certification

Sustainable finance and carbon Neutrality: The role of green bonds, ESG investments, and carbon pricing

From financing to innovation: How green bond issuance promotes corporate green innovation in China

A novel green bond index prediction method based on professional network language sentiment dictionary

The role of ESG score in forecasting China corporate green bond issuance: Evidence from tree-based learning models

Stock market rewards for green credentials: Evidence from green bond issuance in China

ABSTRACT This paper critically examines the structural limitations of sustainable finance in advancing the sustainable development goals (SDGs), despite its exponential market growth. Through a thematic and comparative analysis of key instruments, including green bonds, ESG metrics, and regulatory frameworks, we identify three systemic tensions that undermine measurable impact: the instrument‐impact paradox, the standardization dilemma, and the governance‐capacity gap. Drawing on academic literature, policy reports, and case studies from the EU, Kenya, Rwanda, and Bangladesh, we develop an integrated conceptual framework to diagnose misalignments between financial instruments and SDG performance. The analysis reveals persistent barriers to verification, scalability and institutional readiness, particularly in low‐ and medium‐income countries. To address these challenges, we propose a reform pathway, reforming ESG toward impact‐based metrics, tailoring global standards to regional capacity, and investing in infrastructure for transparency and interdisciplinary implementation. This review contributes a theoretically grounded and empirically informed framework for future research and policy innovation aimed at transitioning sustainable finance from symbolic compliance to meaningful SDG delivery.

Green Bonds (GBs) have emerged as one of the most prominent innovations in sustainable finance instruments in recent times, necessitating an understanding of the factors determining their issuance. However, empirical literature on the factors driving GB issuance in Indonesia is limited. This study aims to investigate the impact of bond characteristics and macroeconomic factors on Government and Corporate Bond issuance from 2018 to 2023 using a random-effects panel regression model. The results confirm that all factors, except economic growth, have a significant effect on GB issuance; however, the impact of some factors differs between government-issued GBs and corporate-issued GBs. Among them, the green stock market and exchange rate have a positive effect on Corporate GB issuance, but the opposite is true for Government GB issuance. Furthermore, increases in interest rates and coupon rates encourage more government GB issuance but have the opposite effect on Corporate GB issuance. Our results contribute to the literature on sustainable finance, providing policymakers, issuers, and investors with valuable practical insights to encourage the development of the green bond market.

This paper sheds light major strategic actions to advance green finance in national financial system of an emerging country, Indonesia and discusses the opportunities and challenges that could be adopted to scale it up and align the ambitious policies with current business practices. Indonesia through active roles of its two regulators, i.e. the Central Bank of Indonesia (Bank Indonesia or BI) and the Financial Services Authority (Otoritas Jasa Keuangan or OJK) have had a leadership role in the implementation of green finance. It includes the introduction of sustainable finance roadmaps, green credit policies, climate risk stress testing initiative, sustainable taxonomies, green or sustainable bonds as well as sustainability oriented corporate reporting. This series of initiatives ideally will expedite the capital flows into green projects to support the sustainable development goals (SDGs) achievement. However, after looking at in details of the credit channeled to green projects, in fact Indonesian financial services sector has done too little in green finance. Apart from formulating policies and regulations to keep up with fast development of global green finance framework, an impact and effectiveness assessment of current policies and regulations are needed to mainstream green finance practice to Indonesian financial system. It should be followed by formulation of right incentive mechanism, massive awareness program, capacity and capability development program, and developing a favourable green finance ecosystem.

Green finance plays a crucial role in promoting economic sustainability. This study explores how green finance drives economic growth and environmental improvements, analyzing its effects through a multi-level framework of macroeconomic variables, environmental performance, and regional industry differences. Results show green finance significantly boosts economic growth, reduces carbon emissions, and improves energy efficiency. From 2018 to 2024, China's carbon emission intensity per unit GDP will decrease by 3.5% annually, while GDP growth increases by about 0.8% for every 1 trillion yuan of green bond issuance. Scenario simulations indicate that with strong policy support and high market participation, carbon intensity could be reduced by nearly 50% by 2042. Based on these findings, the study offers targeted policy recommendations for advancing an eco-friendly financial system.

Aim: This study explores the interaction between clean energy, sustainability, green bonds, and six blockchain indices (e.g., CBDCAI, ICEA, Bitcoin, Ethereum) from October 2017 to June 2023 to highlight sustainability issues related to recent financial innovations. The study aims to examine the extent to which sustainable equity prices are impacted by the stochastic features of Bitcoin and CBDC news across bull, bear, and normal market phases. Method: This study utilizes the Quantile Autoregressive Distributed Lag (QARDL) method to examine the short- and long-run impacts. Results: The QARDL results reveal a significant long-term equilibrium between blockchain variables and the green industry, with varying reactions across quantiles. Bitcoin, Ethereum, and green bonds positively impact the sustainable market index over time, especially in higher quantiles, supporting Sustainable Development Goals (SDGs). Conclusion: The study advocates using blockchain for SDG policies and renewable energy to reduce blockchain’s environmental impact and this research extends the literature by offering a deeper insight into the financial and environmental influences shaping sustainability.

ABSTRACT We examine the effects of issuing green bond on green premium and green signal transmission by matching green bonds with ordinary bonds. We find that the credit spread of green bonds is significantly lower than that of ordinary bonds, especially for those green bonds with lower information disclosure complexity. Besides, issuing green bonds cannot receive a positive response from the stock market, but can significantly reduce issuer’s loan costs and provide more financial subsidies for high polluting issuers. Furthermore, by obtaining discounted loans and financial subsidies, issuing green bonds can increase issuer’s R&D intensity and reduce their carbon emissions. These findings indicate that issuing green bonds can reduce financing costs and convey green signals to market stakeholders with less investment experience.

ABSTRACT This study investigates the impact of issuers’ biodiversity management on green bond prices, focusing on a pivotal question that whether and how private investors price green investments effectively in response to biodiversity losses (Flammer, Giroux, and Heal 2025). Our findings indicate that poor corporate biodiversity management substantially reduces green bond prices, resulting in higher financing costs. Our main results still hold after carrying out various robust checks. We identify two economic channels: corporate financial exposures to physical climate risk and transition risk that impact green bond prices even in the framework of biodiversity finance. Furthermore, we document heterogenous effects on bond prices depending on the specific terms of bonds and issuer’s characteristics, respectively. Our novel evidence demonstrates that private capital can price green bonds to account for risk premiums, contributing to the closure of financing gap and the advancement of biodiversity protection.

Assessing the Role of Green Bonds, Interest Subsidies, and ESG Policies in Driving Private Climate Finance in India within Nationally Determined Contribution Targets

Global concern on climate change has encouraged policymakers and central banks to adopt green financial instruments such as green bonds within sustainable monetary frameworks. Research on the integration of green bonds and monetary policy has grown rapidly in recent years, reflecting wider trends in sustainable finance, climate risk management, and central bank policy innovation. Green bonds play an important role in supporting low-carbon transitions and can influence monetary operations through asset purchases and collateral policies. This study applies a bibliometric analysis of publications on green bonds and monetary policy indexed in Scopus from 2021 to 2025. Using bibliometric methods with VOSviewer and R Studio, the analysis maps dominant themes, co-authorship networks, and the evolution of green monetary studies. The results show strong growth in research output, high levels of international collaboration, and a concentration on sustainable development and green finance. However, fewer studies address climate policy uncertainty and geopolitical risk, even though these factors are highly relevant to financial stability and the effectiveness of monetary policy. Future research in these underexplored areas could provide stronger scientific foundations for building more adaptive and resilient monetary systems in both developed and emerging economies.

Although agriculture is the greatest source of food for food security, local employment, and global economic strength, it is at the same time one of the most sensitive to climate change. Productivity and sustainability are at risk due to rising temperatures, irregular rainfall, soil degradation, and pest outbreaks. The concept of Climate-Smart Agriculture (CSA), advocated by international organizations like FAO and the World Bank, represents a holistic approach for tackling these challenges, integrating coping with adaptation and mitigation into improved productivity. However, the widespread adoption of CSA practices hinges as a first requirement on proper and supportive agricultural finance mechanisms. This article explores the central importance of agricultural finance to climate-smart farming and sustainable agricultural development. The analysis was done at the global level by using secondary data from global databases, reports, and published literature, which investigates how financial tools (microcredit, crop insurance, green bonds, carbon financing, blended finance) facilitate smallholder access to inputs, technologies, and markets. The results underscore the important role played by dedicated funding in advancing water-efficient irrigation, renewable energy for agriculture, improved seed types, and support for land restoration. Evidence from case studies in various regions confirms that finance-based CSA (increase 30%) increases the productivity, de-risks, and builds resilience of smallholder households. The article concludes that orienting agricultural finance towards climate-smart goals is crucial, as is a mix of new financial instruments and public–private partnerships with supportive policies to fill the financing gaps and make sure all actors benefit from these.

SThe green finance structure refers to the configuration of financial instruments within the green finance system, the optimization of which is crucial for efficient resource allocation and corporate green transformation. Using panel data from Chinese A-share listed companies from 2014 to 2021, this study empirically examines the relationship between green finance structure and corporate green transformation. The results reveal a significant inverted U-shaped relationship, indicating that a coordinated balance between market-based and bank-based instruments most effectively promotes green transformation. This relationship is influenced by technological and institutional environments: in high-tech industries and regions with weaker environmental regulations, a more market-oriented green finance structure is associated with stronger transformation performance. Further analysis identifies a significant synergistic effect between green credit and green bonds, showing that their complementarity can further enhance corporate green transformation and varies across different technological and institutional contexts. Heterogeneity analysis indicates that the inverted U-shaped pattern is more pronounced in western regions and among firms with stronger internal control systems, while eastern and central regions exhibit a more linear positive relationship. Overall, this study introduces a structural perspective to explain the role of green finance in supporting corporate sustainability transitions and provides new empirical evidence for optimizing the green financial system.

ABSTRACT Green bonds have emerged as a significant financial instrument with dual benefits, positively impacting corporate performance and environmental sustainability. They focus on stakeholder theory instead of shareholder interest. This study examines the effect of green bond issuance on firm performance, focusing on the mediating roles of firm financial risk and financial quality. Using panel data from 2012 to 2022, the study employs the Propensity Score Matching‐Difference in Differences (PSM‐DID) method to analyze the relationship between green bonds and firm performance. The findings indicate that green bonds enhance both financial and environmental performance. Firms issuing green bonds experience improved firm value (Tobin's Q ) and profitability (ROA), with the effects becoming more pronounced in the second year post‐issuance. Additionally, green bond issuance lowers financial risk, as reflected in reduced debt‐to‐equity ratios, and enhances financial quality, indicated by higher Altman Z ‐scores. Green bonds also reduce the cost of capital (WACC), attracting investors seeking sustainable investments, which typically have lower yields than conventional bonds. On the environmental front, firms that issue green bonds show significant improvements in ESG scores and achieve lower carbon emissions than those that do not issue such bonds. However, while green bond issuance initially leads to a notable reduction in carbon emissions, this effect slightly diminishes in the second year, highlighting the need for sustained sustainability initiatives.

In the contemporary global landscape, there has been a growing uncertainty due to continuous shocks with significant implications on investment and portfolio management. This paper investigates how return spillovers and dependencies between traditional and modern financial assets evolve under varying market conditions, with a focus on the COVID-19 crisis period. Using a quantile vector autoregression (QVAR) model combined with network analysis, we analyse daily asset returns from 02 January 2018 to 30 June 2023 to capture asymmetric and state-dependent connectedness. The study reveals that asset interdependencies intensify during periods of market stress, particularly at extreme quantiles. Green bonds, gold, and AI-related assets exhibit safe-haven characteristics under these conditions. The findings underscore the dynamic nature of market connectedness and provide important insights for portfolio diversification strategies, especially for risk-averse investors navigating turbulent markets.