Green Fund Research Articles

Green Finance Mechanisms for Sustainable Development: Evidence from Panel Data

The nexus between environmental degradation, green finance, and sustainable development has been analyzed in a number of studies. Despite attempts by different studies to fill the gap in the existing literature, they have all failed to do so. This study further extends the existing literature by applying robust techniques such as the system-GMM method and applying various proxies to measure green finance, which other studies have failed to examine. For this purpose, we employ panel data for the period of 1985–2021. Our findings support our hypothesis: while green funding tends to have a positive effect on sustainable development, environmental degradation has exactly the opposite effect. These findings are supported by a wide range of statistical methods, including the system-GMM technique. Our work underlines the major contribution bound to be made by green resources toward legislative frameworks in an attempt to aid the effort of reducing the negative impact of environmental degradation and building a sustainable development path.

Exploring the nexus of green entrepreneurship and environment quality in selected Asian economies

PurposeThis study examines the relationship between green entrepreneurship and environmental quality in selected Asian economies. The impact of green entrepreneurship dimensions, i.e. renewable energy utilization, innovation orientation, green funding and resource efficiency is empirically assessed on environmental quality. The research assists in opening the “black box” mechanism of how green entrepreneurship affects the environmental pillar of sustainability.Design/methodology/approachAn analysis of 11 Asian countries is conducted over the period from 2000 to 2019, using panel regression techniques to examine the link between green entrepreneurship dimensions and environmental quality indicators.FindingsThe findings reveal that all four dimensions of green entrepreneurship have an inverse relationship with carbon emissions and ecological footprint while showing a positive relationship with the load capacity factor. This implies that green entrepreneurship contributes positively to environmental sustainability by enhancing the ecosystem’s resilience and capacity to support life.Practical implicationsWe advocate for policymakers to prioritize green entrepreneurship to stimulate innovation for energy transition and environmental sustainability. Furthermore, creating a conducive atmosphere for green entrepreneurs can spur job creation, economic growth and societal well-being, thus fostering a more resilient and sustainable future for all.Originality/valueIn this study, we adopted a multidimensional approach for measuring green entrepreneurship, which represents an advancement over existing literature that predominantly relied on renewable energy consumption to gauge the green entrepreneurship phenomenon at the macro level.

Financial incentive instruments of regional economy’ «green» transformation

Transformation and development of the economy towards greening is an important measure for different regions to address the global challenges of climate change and rising pollution levels, and a necessary pathway to achieve sustainable development. Whether it is modernization and transformation of green technologies in traditional industries or green management of the public environment, external financial support is needed to compensate for the insufficient investment of micro-economic actors. The purpose of the study is to analyze the key financial instruments that stimulate the green transformation of the regional economy, as well as an attempt to determine the directions of using these instruments to increase the effective supply of green funds and ensure their increasing role in promoting economic transformation on the path of building an ecological civilization. The methodological basis of the study was formed by analytical and comparative methods, as well as relevant works of scientists devoted to the study of the problems of stimulating environmentally-oriented transformation processes, primarily in the regional context. The results of the analysis show that, given the important supporting role of finance in the green transformation of the economy and the fact that the relevant research is still at the initial stage, the systemic mechanism of financial stimulation of the regional economy’ green transformation should be based on three elements: financial support, capital allocation and risk diversification. It is demonstrated that the development of green economy cannot be separated from the increasing innovation dynamics of "green" financial products, so it is necessary to increase efforts in the field of development and implementation of financial innovations, to provide priority financial support to key sectors of the green economy.

Green fund investors and ESG performance: Evidence from China

Using the ESG scores from the Bloomberg Database and the manually filtered green fund investor data, we study the influence of green fund investors on the Chinese A-shares' ESG performance. As we have found, the holding of fund investors who pay attention to sustainable development can improve the firm's ESG performance, and this improvement is more pronounced in state-owned enterprises, heavily polluting industries, and after the green policy announcement. Our findings are robust after considering the reverse causality endogeneity concern and sample selection bias. In addition, the holdings of green fund investors favor the company's status as a green index constituent and its long-term financial performance. Further, the mechanism test reveals the influencing channel of this improvement and supports that it is long-term green fund investors themselves improving the firms' ESG performance and can improve a firm's ESG performance by attracting other long-term investors and new mutual fund investors, and increasing the level of media scrutiny pressure. Our paper contributes to figuring out the impact of institutional holding on ESG development and further points out the source of this influence.

Impact of sustainable energy, fossil fuels and green finance on ecosystem: Evidence from China

The adoption of sustainable energy has increased as a substitute for petroleum derivatives due to growing concerns about environmental degradation caused by pollution and non-renewable energy sources. This study aims to investigate the impact of sustainable energy, green finance, and fossil fuels on the ecology of China. Instead of using traditional intermediaries like CO2 and EF, we employed the ecosystem habitat index to evaluate the conservation of terrestrial ecosystems. This index measures the extent of habitat destruction, deterioration, and fragmentation. The research demonstrated that implementing ecological power and green finance in China has enhanced the country's ability to safeguard and enhance its ecosystem in the short and long term. Furthermore, the findings suggest that using non-renewable energy sources in China has heightened the risk to biodiversity and the ecosystem. The analysis indicates that prioritizing green funding and renewable energy sources is crucial for policymakers, legislators, and investors to safeguard and enhance ecosystem diversity.

Analyzing nonlinear and asymmetric effects of green finance and renewable energy on energy efficiency amidst technological innovation in E7 countries

The study aims to explore the relationship between green funding, green energy, and energy efficiency in E7 countries, guided by the SDG-7 guidelines recommended by the United Nations General Assembly. Methodologically, the study employs the Nonlinear Autoregressive Distributed Lag (NARDL) and Two-Stage Least Squares (2SLS) techniques on data collected between 1988 and 2022. The rationale for this approach lies in its ability to capture both short-term and long-term dynamics in the relationship between green funding, green energy, and energy efficiency. Analysis of the data reveals varying stages of green funding growth among E7 countries, with China (1.52), Brazil (1.44), India (1.35), Indonesia (1.94), Mexico (1.73), and Russia (1.93) exhibiting different levels of progress. Russia and Turkey are identified as having the highest Gini coefficients in 2019, indicating disparities in green funding distribution within these countries. The empirical findings underscore the critical role of investment in the energy sector by both corporations and the public sector to enhance access to electricity, bolster energy security, and foster environmentally sustainable economic development. However, the study identifies insufficient investment as a fundamental obstacle hindering progress in green energy efficiency in E7 nations. Despite the potential for implementing energy efficiency measures and renewable energy sources in E7 countries, the future remains uncertain due to existing obstacles in green financing and regulatory frameworks. Consequently, the paper emphasizes the imperative of addressing these obstacles to unlock the full funding potential for energy efficiency initiatives in E7 nations.

Decomposition of carbon emissions and companies’ willingness-to-pay for Green Fund: evidence from the manufacturing sector in Busan, South Korea

ABSTRACT The impact of carbon neutrality on the manufacturing sector, through regulatory and carbon pricing mechanisms, pushes companies toward environmental-friendly management. This paper seeks to examine the manufacturing sector’s willingness-to-pay (WTP) for the Busan Green Fund, an initiative designed to incentivize companies to adopt green management practices in Busan Metropolitan City. Three industries with the highest level of CO2 emissions are selected utilizing the Logarithmic Mean Divisia Index (LMDI) method. Companies in these three key industries are surveyed regarding their WTP, beyond their energy costs, for the Busan Green Fund. The study also investigates the characteristics of these companies. The average WTP is an 11.1% premium on energy costs. The regression results show that WTP is significantly influenced by the level of investment in energy-saving technology and company size. Based on our analysis of CO2 emission trends within the manufacturing sector, policy implications are suggested for sustainable development via the operation of a dedicated fund.

DIGITALLY DRIVEN MODEL OF A CLIMATE-NEUTRAL ECONOMY IN TERMS OF GLOBAL FINANCIAL CAPACITY

The article explores the conditions and drivers for the development of a climate-neutral economy model, emphasizing the pivotal role of digital transformation. A crucial lever in deploying this model is the proactive engagement of international financial entities within the realm of global green financing. The study highlights the instrumental role of green funds as key players in shaping global financial capacity and providing multilateral support for climate change adaptation worldwide. It delves into the overarching frameworks and mechanisms of such assistance. Employing a systematic analysis alongside case studies of the Green Climate Fund's projects, the authors aim to identify the most impactful sectors for cultivating a climate-neutral economy. The research identifies four essential segments for achieving climate neutrality: digitalization for climate, strengthening the financial capacity and business sustainability, rethinking ecosystem development, and community empowerment. The investigation draws on extensive data regarding the execution of 240 climate projects across major beneficiaries of climate finance in Eastern Europe, Africa, the Asia-Pacific, and Latin America. It shows that modern climate finance demonstrates signs of geopolitical dependency and polarization in global influence. The findings argue for bolstering the regional presence of climate funds to increase the financial capacity to implement climate-neutral projects at the local level. The article underscores the scale of financial support required across each segment, as well as the leading role of pre-project preparation. The authors substantiate the overarching and twofold role of digitalization in the model of a climate-neutral economy. The digital transformation produces a whole cluster of independent and versatile IT products for green businesses, industries and governance. On the other hand, digitalization creates an informational environment and a powerful digital infrastructure for better efficacy of other crucial segments. Specifically, it provides digital decisions for financial solvency and sustainability of green businesses in terms of green lending, grants and Fintech; strengthens information awareness and involvement of vulnerable communities in green economy processes; promotes digital support for overall ecosystem adaptation.

Acting for good, being good or feeling good? Exploring factors influencing individual investors’ willingness to invest in green funds

This paper empirically investigates the determinants of willingness to do good of green investment within a real-world context. Using data from a questionnaire administered between December 2021 and January 2022 to French individual investors, we find that “being good” (altruism) and “acting for good” (perceived impact) exert a substantial influence on both the decision-making process and the amount invested in green funds, while positive emotions (warm glow) are not significantly linked. This research highlights the core importance of altruism in green investment decision.

Research on the Impact of Financial Agglomeration on Green Investment

With growing global attention on sustainable environmental development, green investment has become an important tool to drive the green transformation of the economy. Financial agglomeration areas, as capital-intensive regions, provide strong support for green technological innovation and eco-environmental projects. Additionally, the policy inclinations and investment preferences of financial agglomeration areas directly influence the flow and efficiency of green funds, further shaping the path of economic green transformation. Based on this, this paper selects panel data from 31 provinces in China (except Hong Kong, Macau, and Taiwan) over 15 years from 2007 to 2021. Using the fixed effects model, the study examines the impact of financial agglomeration on the scale of green investment and conducts a heterogeneous analysis of the effects in different regions of China, as well as proposing related policy suggestions. The results show that an increase in the level of financial agglomeration can significantly enhance the scale of green investment in a region, especially in the central regions. Compared to the eastern and western regions, the promotion effect of financial agglomeration is more pronounced in the central region.

The impact of incentive policies on shipowners' adoption behavior of clean energy technologies: Evidence from China

Incentive policies are an important driving force in promoting the adoption of clean energy technology. To enhance the effectiveness of incentive policies at the early stage of clean energy technology development, this study focuses on shipowners as the main body of clean energy technology application, starts from the micro viewpoint of shipowners, takes into account the psychological factors of shipowners, and expands the traditional Theory of Planned Behavior (TPB) by taking the incentive policy variables as the external driving factors, construct a theoretical framework of the impact of incentive policies on shipowners' behavior. Structural equation modeling is used to verify the constructed theoretical assumptions and explore the operation mechanism between different types of incentive policies and shipowners' behavior. A survey of 236 shipowners in China shows that: (1) Financial incentive policies have a greater impact on shipowners' adoption of clean energy technologies than non-financial incentive policies. Green funds, tax exemptions, infrastructure construction, and shipping route priority are considered the most attractive policy measures. (2) The three psychological variables of behavioral attitudes, subjective norms, and perceived behavioral control have a significant positive impact on shipowners' intentions and behavior. The research findings can provide strong decision-making support for the design of incentive policies to promote the adoption of clean energy technologies on ships.

Can digital transformation curtail carbon emissions? Evidence from a quasi-natural experiment

Digital infrastructure construction (DIC) is a crucial component of digital transformation, yet its impact on the sustainable development of cities remains uncertain. To address this question, this study employs the Difference-in-Differences (DID) model to evaluate the effects of a typical DIC policy, the Broadband China Pilot (BBCP) policy. The research sample covers data from Chinese cities from 2009 to 2019. The DID estimation demonstrates that the BBCP policy effectively decreased carbon emissions (COE). Robustness tests, such as parallel trend tests, placebo tests, propensity score matching DID, and local projection DID, all confirm the negative impact of the BBCP policy on COE. Heterogeneity analysis reveals that the BBCP policy has a greater mitigation effect on COE in non-resource cities. The BBCP policy has a stronger effect on reducing the COE in cities with a higher proportion of green funds or lower fiscal expenditures. Further analysis indicates that the BBCP policy significantly improves low-carbon ecological efficiency and reduces COE intensity. The results of the mechanism analysis reveal that the BBCP policy lowers COE by enhancing the industrial structure and promoting green technological progress. The study provides policy recommendations in the realm of DIC for developing countries to achieve digital transformation and low COE development concurrently. This research can assist governments in better considering how to implement DIC policies to construct ecologically sustainable cities with low COE.

Renewable energy transition and green productivity growth in sub‐Saharan African countries: A convergence analysis

AbstractClimate change is one of the main issues facing countries in sub‐Saharan Africa. Improving green productivity is essential for transitioning to low‐carbon economies and mitigating climate change in this region. The existing literature does not emphasise the role of the energy transition in green productivity growth. Yet this analysis is important given the essential role of energy in the production process and the high endowment of renewable energy sources in the area. Thus, this paper contributes to the literature by examining the effect of the renewable energy transition on green productivity growth through a convergence analysis for 35 sub‐Saharan African countries from 2000 to 2020. The results of the logt test reveal the existence of three main convergence clubs in terms of green productivity. The first club with low productivity is made up of 23 countries, the second club with average productivity contains 8 countries, and the third club with high productivity comprises 3 countries, while 1 country is divergent. The renewable energy transition is a determining factor in the formation of these convergence clubs. Indeed, the results of the ordered logit regression show that an increase in the level of the renewable energy transition has a positive impact on the probability of countries joining convergence clubs with higher green productivity. Further analysis with the Generalized Method of Moment (GMM) reveals that the critical threshold for renewable energy share in the energy mix that allows countries to converge globally toward the green productivity frontier in the long term is 32.63%. Regarding policy implications, the results highlight the need to encourage the renewable energy transition to increase green productivity in sub‐Saharan African countries. This could involve strengthening policies to promote investment in the sector (creation of green funds and/or tax incentives) and subsidies for renewable energy consumption.

Do policy uncertainty and ESG sentiment drive ESG commitment of green funds?

In this study, we examine the effect of economic policy uncertainty (EPU) and environmental, social and governance (ESG) sentiment on the motivation of green funds (GFs) to pursue ESG objectives. We use data on US mutual funds that market themselves as having socially responsible investment (SRI) mandates (hereafter green funds) and find that managers increase their ESG practices in the subsequent year when EPU or investor’s attention to ESG issue rise. Interestingly, this pattern remains unchanged during crisis period (Covid-19 pandemic), although the marginal effect is much more lower. Our results show also that higher performance (alphas) decreases the ESG commitment of green funds in the subsequent year. Our findings suggest that policy uncertainty and ESG sentiment affect the motivations of green funds to pursue ESG objectives.

The influence of green financing on renewable energy progress in India's tourism sector

ABSTRACT This study employs the Autoregressive Distributed Lag (ARDL) approach to assess the impact of green funding on sustainable energy practices in India's tourist sector from 2000 to 2022. Results indicate that green bonds significantly and favourably influence long-term environmental sustainability, with negligible immediate effects. The Consumer Price Index adversely affects sustainability in both short and long terms. To enhance sustainability, recommended policy measures include increased regulatory supervision, transparent market information dissemination, eco-friendly fiscal policies, and the adoption of green building technologies. Supporting sustainable globalization, innovation, adaptation, and eco-tourism regionalism can greatly benefit India's tourism industry. The study offers valuable insights for policymakers aiming to promote environmental sustainability in the sector.

Sustainable Consumer Behaviours through Comparisons of Developed and Developing Nations

Sustainable consumption is crucial for mitigating environmental harm and combating climate change. This study examines sustainable consumer behaviour in developed and developing countries, aiming to identify drivers and barriers to responsible consumption patterns. Using qualitative data analysis, we explore factors influencing consumer attitudes and behaviours. Adopting an exploratory approach, we employ interpretivist philosophy and thematic analysis. Through case study methodology and secondary data sources, we analyse drivers, attitudes, and barriers to sustainable consumption. The study findings indicate that consumers in both developed and developing countries exhibit a keen interest in embracing sustainable consumption to contribute to environmental preservation. Corporate social responsibility towards sustainability influences consumer purchasing decisions, highlighting the importance of green initiatives within companies. Recommendations include implementing Green Fund Schemes at the governmental level and sustainability audits within corporations to promote and sustain sustainability efforts. Collaborative endeavours among consumers, corporations, and authorities are essential for promoting sustainability and safeguarding the environment.

The Path of Empowering Digital Industry with Green Finance for Green and Low Carbon Development

Green and low-carbon development is a consensus among countries around the world on the development of the digital industry. The digital industry, as a pillar industry of China's economy, is a high energy consuming and carbon emitting industry. Therefore, the green and low-carbon transformation of the digital industry is of great significance for China to achieve its "dual carbon" goals. The achievement of the "dual carbon" goal relies on the support of financial services, and green finance plays three roles in guiding resource allocation, market price discovery, and risk management in its development process, mainly including financial products such as green credit, green bonds, green funds, and carbon markets. By building a green financial system that meets the requirements of low-carbon transformation, exploring new growth opportunities in the process of low-carbon transformation, taking precautions, using green finance, enterprise information environment disclosure and other means to guide the rational allocation of funds, using market means for low-carbon investment, reducing investment risks in the process of green transformation, and promoting low-carbon transformation of the digital industry.

Fuzzy Analysis of Financial Risk Management Strategies for Sustainable Public–Private Partnership Infrastructure Projects in Ghana

Public–private partnership (PPP) is a prominent tool for sustainable infrastructure development. However, the positive contributions of PPPs toward the attainment of sustainable, climate resilience and zero-carbon infrastructure projects are hampered by poor financial risk management. This problem is more prevalent in developing countries like Ghana where private investment inflow has plummeted due to the COVID-19 recession and poor project performance. Thus, this study aims to assess the key financial risk management strategies in ensuring sustainable PPP infrastructure projects in Ghana. The study utilised primary data from PPP practitioners in Ghana solicited through survey questionnaires. Factor analysis, mean scores and fuzzy synthetic analysis are the data analysis techniques for this study. The results revealed that sustainable and green funding models, effective cost-reduction initiatives, a competent team with committed leadership and emerging technologies and regulations constitute the key strategies for managing the financial risks of sustainable PPP infrastructure projects. Although future studies must expand the scope of data gathering, the findings of the study enrich the theoretical understanding of financial risks in sustainable investments in PPP infrastructures. Relevant remedies that will aid the development of practical financial risk management guidelines are also provided in this study for PPP practitioners.

Assessing the impact of green finance on financial performance in Chinese eco-friendly enterprise

This study pioneers the construction of a regional Green Finance Development Index, meticulously examining the significant influence of green financing on the financial performance of ecologically responsible enterprises within the intricate landscape of China. Demonstrating a profound correlation, green finance emerges as a pivotal incentive, increasing the economic expertise of environmentally conscientious firms through the strategic consolidation of capital and the consistent exchange of vital information. Leveraging empirical data from 2012 to 2022 and focusing on green-listed enterprises, the study analyzes the nexus between green financing and corporate financial competency by employing the GMM Model. Notably, the study highlights the pivotal role of Research and Development (R&D) innovation as a channel for the transformative impact exercised by green funding. Discerning insights surface in exploring heterogeneity, revealing a pronounced inclination of green financing towards strengthening clean energy firms and enterprises operating with diminished reliance on government subsidies. This empirical research enhances the scientific basis of the green finance approach and establishes a strong platform for making decisions, promoting the sustainable proliferation of green sectors and businesses.

Can green funds improve corporate environmental, social, and governance performance? Evidence from Chinese-listed companies.

Green funds play pivotal roles in driving corporate sustainable development. Utilizing data from Chinese publicly listed companies from 2010 to 2021, we examine the impact of green funds on corporate environmental, social, and governance (ESG) performance and the underlying mechanisms. The research findings claim that green funds positively affect corporate ESG performance. Mechanism analysis systematically demonstrates that green funds contribute to elevated corporate ESG performance by alleviating financial constraints, enhancing managerial efficiency, and fostering green innovation. Heterogeneity analysis further underscores that the effect of green funds is particularly potent in companies with high external attention. Furthermore, green funds also play significant roles in production capabilities and economic value. This research enriches the micro-level evidence on the development of green funds and furnishes substantial implications for sustainable development.