Green Finance Research Articles

The effect of green finance on the transformation and upgrading of manufacturing industries in the Yangtze River economic belt of China

IntroductionChina’s manufacturing sector is a cornerstone of its industrial system. However, some parts of China are dominated by heavy chemicals, which leads to severe environmental pollution. The emergence of green finance (GF) can influence social capital to gradually withdraw from companies that emit pollution and increase investment in environmentally friendly ones.MethodsThis paper selects the data related to GF and the manufacturing industry (MI) from 2011 to 2020 by exploring the effect of GF on the transformation and upgrading of manufacturing industries (MIU) through literature analysis and the Spatial Durbin model.ResultsThe results demonstrate that GF positively influences the promotion of MIU, whereas MIU has a good spatial spillover effect. The results of this regression remain robust after a series of tests.DiscussionThis research suggests that the government and enterprises should pay attention to GF and encourage more enterprises to take the initiative to adjust the industrial direction and achieve a clean upgrade in manufacturing.

Marketing-Driven Supply Chain Innovation: A Framework for FMCG SME Sustainability

In an increasingly competitive and sustainability-conscious market, small and medium-sized enterprises (SMEs) in the Fast-Moving Consumer Goods (FMCG) sector face unique challenges in achieving long-term sustainability. This review explores the concept of marketing-driven supply chain innovation as a strategic framework for enhancing SME sustainability. By integrating consumer-centric marketing strategies with supply chain operations, SMEs can align their product offerings, sourcing practices, and logistics with growing consumer demand for environmentally and socially responsible products. The framework outlined in this study includes key components such as sustainable product design, green logistics, ethical sourcing, and the incorporation of circular economy principles. Additionally, technology-driven innovation, such as data analytics and digital platforms, is emphasized as a tool to improve supply chain transparency, reduce waste, and optimize resource utilization. Through these collaborative efforts, SMEs can foster stronger consumer trust, enhance brand loyalty, and build a competitive edge in the market. Despite the potential benefits, the review also discusses the challenges SMEs may face, including limited financial resources, resistance to organizational change, and balancing profitability with sustainability goals. However, by leveraging green financing options, cross-sector partnerships, and phased implementation strategies, SMEs can overcome these barriers. Ultimately, the integration of marketing-driven supply chain innovation is positioned as a critical path for FMCG SMEs to achieve long-term sustainability, profitability, and market competitiveness in an evolving global economy. Keywords: Marketing-Driven, Supply Chain, FMCG SME, Review.

Implementing sustainability taxonomies to redirect capital flows: the case of South Africa

ABSTRACT Sustainability taxonomies are comprehensive classification systems that define what constitutes a sustainable economic activity. They aim to increase transparency in financial markets and redirect capital flows to sustainable investments. Such sustainable finance policies can be important levers for the transformation of the economy towards climate neutrality, as today’s investments will shape economic production processes for decades to come. While sustainability taxonomies have been developed in recent years in many countries, existing research on taxonomies has so far often focused on the European Union and has hardly addressed questions of policy implementation. This case study focuses on South Africa’s Green Finance Taxonomy (GFT) and addresses the question of what factors influence the adoption of sustainability taxonomies by potential users. Based on 44 semi-structured expert interviews with taxonomy stakeholders from the private sector, government, civil society and academia, it finds that one year after its publication, the GFT has hardly been used in practice. Important factors hindering an effective implementation are a lack of regulatory embedding, the absence of a legal recognition of the GFT by the European Union (EU), hesitance among financial market participants to build capacity to collect the necessary data, and fossil-fuel path dependencies in South Africa’s economy. Given the difficulties many jurisdictions currently face in implementing their newly developed sustainability taxonomies, these findings have important policy implications not only for South Africa but also for other countries.

Retraction Note: The influence of environmental and social criteria in green finance decision-making: insights and trends

Retraction Note: The influence of environmental and social criteria in green finance decision-making: insights and trends

Green Financial Policy for Fostering Green Technological Innovation: The Role of Financing Constraints, Science Expenditure, and Heightened Industrial Structure

The environment has become an increasing concern due to the accelerated expansion of the world’s economy. Green finance is a crucial strategy for China to address challenges in fostering green innovation and achieving sustainable development. By employing the difference-in-differences (DID) method, this study assessed the influence of green financial policy (GFP) on green technological innovation (GTI) in the Yangtze River Economic Belt (YREB). The results indicate that GFP significantly improves GTI, especially in cities with a lower level of green finance development, cities with a medium level of GTI, and cities upstream of the Yangtze River. A mechanism analysis found that GFP promotes GTI in the YREB by alleviating financing constraints and increasing science expenditures. However, it fails to improve GTI through the heightened industrial structure. The findings provide empirical proof and policy direction for the reformation of green financing and the achievement of ecological transformation in the river basin economy in accordance with the ‘dual-carbon’ goal.

Impact of Green Finance on Carbon Emissions: Empirical Analysis Based on Chinese Provincial Panel Data

Impact of Green Finance on Carbon Emissions: Empirical Analysis Based on Chinese Provincial Panel Data

The Role of ESG Strategy Implementation in Long-Term Value Creation for Companies

In the context of increasing global focus on sustainable development, companies face new challenges and opportunities in creating long-term value. As a core framework for sustainable development, ESG (Environmental, Social, and Governance) strategies are gradually becoming key factors in enhancing long-term value for businesses. This paper systematically explores the role of ESG strategies in long-term value creation, with a focus on analyzing their impact on financial performance, brand reputation, innovation capability, and emerging market opportunities. Through an in-depth analysis of ESG strategy implementation, this paper reveals new opportunities arising from green finance and investment, sustainable supply chain development, policy support, and digital transformation, and proposes specific application strategies for businesses in these areas. The research findings indicate that ESG strategies can not only optimize financial performance and brand image but also drive technological innovation and business model transformation, thus laying a solid foundation for long-term value creation.

The Role of Technology in Promoting Green Finance: A Systematic Literature Survey and the Development of a Framework

Green finance, defined as channeling money into sustainable development activities, is still far lower than needed to achieve net-zero emissions objectives. In this paper, we discuss the role of technologies in developing green finance. We identify that green finance faces three major challenges, including the risk management of green projects, the scarcity of innovative green financing products, and compliance with the regulations. Then, in the context of the existing literature, we explore recent technologies, including blockchain, artificial intelligence (AI), machine learning (ML), data analytics, Internet of Things (IoT), and robotics that are helping to deal with the challenges in green finance. We show that data-driven approaches utilizing AI and ML help in the risk assessment of green projects; FinTech-based crowdfunding platforms provide innovative green financial products and regulatory technologies (RegTech) support in compliance with regulations. We also identify that the environmental footprint of cryptocurrencies is an emerging area in the technologies and green finance domain. Our framework could be helpful to further extend the debate on the role of technology in green finance.

Global Green Finance: Roadmap for India

Climate change, and especially, ‘climate deterioration’ is an alarming situation for the global scenario, and thus, the need for developing financial services and products that aim to reduce the effects of these changes is the need of the hour. This long-felt need has given birth to a new form of investing, known as green finance or broadly, sustainable finance. So, it can be said that green finance is a subset under the larger umbrella of the concept of sustainable finance. This article tries to bring to the knowledge of the readers the basic understanding of the concept of green finance, its various instruments available globally and its developments at the global and Indian level, highlighting the three stages of green finance’s evolution and its major theories. Further, it reveals the global presence of major green finance instruments like green bonds and its types, green mutual funds (MFs) and green stock exchanges. The article also deals with the concepts of emissions trading system and European Union’s Carbon Border Tax. The discussion becomes more specific in the subsequent sections, drawing the present picture of green finance concerning the Indian scenario—its green bank, green bonds, green MF and green stock exchange. Reserve Bank of India’s recent guidelines regarding green finance and India’s presidency at the last held G20 summit are also discussed, finally concluding with mapping the road ahead for India.

Analysis on the relationship among green finance, government environmental governance and green economic efficiency: evidence from China

Analysis on the relationship among green finance, government environmental governance and green economic efficiency: evidence from China

Pengaruh Green Finance terhadap Keputusan Investasi pada Sektor Energi Baru Terbarukan di Bursa Efek Indonesia

The present study investigates the impact of green financing rules on investment decisions made by investors in the Indonesia Stock Exchange-listed New and Renewable Energy sector. The move toward cleaner energy is being fueled in large part by green finance due to the growing focus on sustainability and its effects on the environment. Using a census approach to gather data from the financial statements of firms in the New and Renewable Energy Sector, simple linear regression analysis is the research method employed, along with the green finance policies that are relevant in Indonesia. The study's findings demonstrate that green financing has a major and favorable impact on this industry's investment choices. Additionally, businesses that employ green financing are more likely to do financially well, which draws in additional investors. This finding highlights the significance of putting more targeted measures into place to support green finance investment in order to meet sustainability and economic growth objectives in the New and Renewable Energy Sector, which has important ramifications for investors and policymakers.

THEORETICAL ASPECTS OF GREEN FINANCING FOR PROVIDING SUSTAINABLE DEVELOPMENT

This article explores the theoretical foundations of green finance as a crucial tool for achieving sustainable development goals. Green finance supports environmentally friendly initiatives and projects that align with sustainability principles, particularly by providing funding for low-carbon projects and environmentally sound technologies. The article delves into the conceptual frameworks that underpin green finance and examines its connections with the economic, social, and environmental dimensions of sustainable development. It emphasizes the role that green finance plays in balancing economic growth with environmental stewardship and social well-being, thus contributing to a more sustainable global economy. The key instruments of green finance, including green bonds, sustainability-focused investment funds, and responsible financing mechanisms, are thoroughly analyzed to understand their significance in promoting sustainable economic growth. These tools not only facilitate the funding of eco-friendly projects but also help shift financial markets toward more responsible practices. In this context, the article emphasizes the pivotal role played by international financial institutions, governments, and the private sector in driving green investments and fostering an economy that is conscious of its environmental impact. Particular attention is given to policy frameworks and regulatory measures that can create favorable conditions for the expansion of green finance, such as tax incentives, subsidies, and environmental regulations that encourage sustainable investment. Moreover, the article addresses the challenges impeding the development of green finance. These challenges include scalability issues, market regulation difficulties, and the need for increased international cooperation. Overcoming these obstacles is essential to unlock the full potential of green finance and ensure that it can contribute effectively to global efforts in combating climate change. The article also explores the future prospects of green finance within the broader context of transitioning toward more sustainable economic models and identifies opportunities for innovation and growth in this sector. Finally, the article highlights international strategies and showcases successful examples of green projects from different countries around the world. These case studies provide insight into the positive impacts of green finance on economic stability and the reduction of carbon emissions, offering a clearer understanding of how green finance can play a central role in fostering long-term sustainability on a global scale.

Raising Green Finance Allocation Through Robust Governance: Evidence from Pakistani Corporations

Raising Green Finance Allocation Through Robust Governance: Evidence from Pakistani Corporations

Inquisitive exploration of green finance, social finance, and capital formation in shaping economic development: insights from BRICS Countries

The significance of democratic commitment is highlighted on a global scale by the importance placed on offering a multitude of chances to establish enduring ecosystems and foster economic progress. Social finance, capital formation, and green finance have recently received a lot of attention from this perspective. Past studies mainly examined social finance and green finance in isolation. When investigating the individual impact of these important variables on economic growth in the occurrence of important events like the COVID-19 pandemic and other environmental pollution issues, most studies have mainly focused on developed countries, ultimately ignoring the different dynamics in emerging economies. The purpose of the research is to investigate the joint interaction between social finance (Social Impact Bonds), capital formation, and green finance (green loans, green investments, and green security) on economic development in BRICS economies. This research employed a longitudinal dataset from 2013 to 2023. The generalized method of moments (GMM) and fixed effect model (FEM) were employed in this research as statistical techniques for estimating parameters. The findings of this study revealed a positive joint relationship between green finance, capital formation, and social financing on economic development of BRICS economies. Therefore, measures that jointly promote social and green finance amidst environmental challenges or economic risks could present opportunities to mitigate the vulnerability of a country's economic prosperity. This research will surely guide policymakers in developing economies on how to give considerable attention to sustainable aspects while formulating policies and strategies aimed at economic development.

Circular Economy in Morocco: Status and Perspectives and Policy Implications for Vietnam

This paper explores the current status of the circular economy (CE) in Morocco, its potential future directions, and policy implications for Vietnam. The concept of CE, which promotes sustainable resource use, waste reduction, and regeneration, is increasingly gaining global traction. Morocco, having made significant progress in sectors such as waste management, agriculture, renewable energy, and water resource management, serves as a valuable case study. Key initiatives like the National Solid Waste Management Program (PNDM) and the "Green Morocco Plan" highlight Morocco’s successful integration of CE principles. Despite challenges such as financial constraints and low public awareness, Morocco's transition to a circular economy presents numerous opportunities, including job creation and innovation. For Vietnam, which faces growing environmental and resource pressures, Morocco’s experience offers critical insights. By adopting CE principles in waste management, agriculture, renewable energy, and water management, Vietnam can move toward more sustainable development. The paper suggests specific policy recommendations, including fostering public-private partnerships, enhancing regulatory frameworks, and promoting green financing. The lessons drawn from Morocco’s journey can help Vietnam align its growth with environmental sustainability, positioning both countries as leaders in the global shift towards a circular economy.

THE IMPACT OF GREEN FINANCE ON BANKING PERFORMANCE IN INDONESIA

Green Finance refers to financial practices that can be described through financial services and products that take environmental sustainability to support sustainable development. The role of green finance is to connect financial goals with the environment to encourage inclusive economic growth. One form of green finance implementation is in financial institutions, especially banking. This study aims to analyze the impact of green finance implementation in the banking sector on banking performance as proxied by the profitability ratio in the 2018-2022 period. The Generalized Method of Moments (GMM) dynamic panel is used. The Green Daily Operation (GDO) and Green Finance Policy (GFP) variables indicate the implementation of green finance in banking. Other independent variables use banking performance ratios consisting of the capital adequacy ratio, non-performing loans, and the bank's operational efficiency ratio. The study results show that green finance represented by implementing GFP can increase profitability, while GDO does not significantly affect banks' profitability in Indonesia. Furthermore, the internal banking ratio that is not significant to profitability is the capital adequacy ratio, while increasing non-performing loans and operational efficiency ratio significantly negatively impacts bank performance because it reduces profitability. This research supports applying the green concept in the banking sector to improve sustainable bank performance.

Research on factors affecting green financial development in Vietnam

This study was conducted to examine the factors affecting the development of green finance in Vietnam.Using quantitative research methods, based on a survey of 152 employees and managers of 7 financial institutions and 7 large enterprises in Vietnam. The research results show that there are 5 factors that have a similar and direct impact in descending order on the development of green finance in Vietnam, specifically as follows: The level of awareness and demand for green investment; Legal environment; Economic environment; Institutional capacity; and International finance. These findings underscore the importance of raising awareness, attracting green investment, and leveraging international financial resources. Based on the results of the study, a number of incentives are offered to stakeholders to promote green finance, including strengthening the regulatory environment, improving institutional capacity, raising awareness and demand for green investment, leveraging international finance, and maintaining a favorable economic environment. This study contributes to a better understanding of the factors affecting the development of green finance in Vietnam, thereby providing important insights to develop effective policies and strategies to promote this sector in developing countries

Climate Change Effects in Stock Markets

Climate change significantly impacts global stock markets through both short-term extreme weather events and long-term climate shifts. This study examines the relationship between CO2 emissions and stock returns across 19 countries from 2001 to 2020 using regression analysis. The findings also reveal a positive correlation between CO2 emissions and stock returns, indicating that investors anticipate higher returns to offset climate-related risks. This suggests that higher CO2 emissions drive investor expectations for increased returns to compensate for potential economic losses. The study highlights the importance of balanced emission reduction strategies and promoting green finance to support sustainable economic growth. Additionally, it underscores the need to integrate climate risks into financial decision-making, offering valuable insights into the financial implications of climate change and guiding policymakers and investors in addressing these challenges. By providing empirical evidence on the link between CO2 emissions and stock returns, this research enriches existing knowledge and emphasizes the financial risks and opportunities presented by climate change. The study's results align with the carbon risk premium theory, which posits that investors demand higher returns from companies with higher carbon emissions. This study advocates for policies that balance economic growth with environmental sustainability, promoting green finance initiatives to facilitate the transition to a low-carbon economy and mitigate the adverse effects of climate change on financial markets.

The effect of green credit policy on carbon emissions based on China’s provincial panel data

The attainment of “carbon peaking” and “carbon neutrality” is of utmost significance for the optimal progress of China’s economy. As the main channel for green finance, the carbon reduction effectiveness of green credit policy is worth discussing. This article constructs an analytical framework for green credit, carbon emissions and technological advancement. Based on panel data from 30 provincial administrative regions in China from 2012 to 2021, this article uses the mediation effect model and the Spatial Durbin Model to investigate the transmission mechanism and spatial spillover effect of green credit policies on carbon emissions. According to baseline regression model results, our study revealed that overall, carbon emissions were reduced by green credit. The spatial spillover effect of green credit on carbon emissions points to the interconnectedness of different regions in terms of environmental impact. The significant negative indirect effect indicates that the increase of local green credit also has a significant inhibitory effect on surrounding carbon dioxide emissions. It suggests that efforts to reduce carbon emissions in one area can have positive consequences for neighboring regions as well. Green credit is able to reduce carbon emissions indirectly via technological advancement, according to the mechanism testing mediation effect model. This paper presents policy recommendations for relevant departments.

Fintech’s role in carbon emission efficiency: dynamic spatial analysis

Against the backdrop of digitization and global warming, fintech plays a crucial role in accelerating the growth of green finance, driving innovation in the financial industry, and catalyzing the low-carbon transformation of economic activities. This paper utilizes city panel data from 2007 to 2019 to examine the direct impact of fintech on carbon emission efficiency (CEE), the transmission channels of green technological innovation and green finance, and the spatial spillover effects, using dynamic panel models, mediation effect models, and dynamic spatial Durbin models (SDM). The study finds that: (i) Fintech significantly improves CEE, and this conclusion remains robust after accounting for potential endogeneity issues and conducting robustness tests. (ii) Mechanism analysis reveals that green finance and green technological innovation are the primary channels through which fintech influences CEE. (iii) Results from the dynamic SDM model indicate that fintech has a significant positive spatial spillover effect on CEE, with the long-term spillover effect being smaller than the short-term spillover effect. (iv) Heterogeneity analysis reveals that fintech’s improvement effect on CEE is mainly evident in eastern regions, emerging first-tier and first-tier cities, and non-resource-based cities. Our research provides new insights for policymakers on achieving China’s dual-carbon goals through the promotion of fintech development, green finance, and green technological innovation. It also aids in the coordinated development of fintech among cities and the formulation of differentiated policies, providing a theoretical foundation and empirical support for future research.