Behavioral evidence is provided on the monitoring-cost channel of cross-border green bond home bias, suggesting that programmable governance can complement weak institutional enforcement by improving perceived credibility, reducing information asymmetry, and strengthening the monitorability of ESG commitments—while remaining dependent on legal and regulatory institutions for dispute resolution and accountability.
Abstract
Green bonds are increasingly used to finance sustainability transitions, yet in emerging economies, their effectiveness is often undermined by weak governance capacity, fragmented regulatory enforcement, and persistent information asymmetry. These structural constraints reduce investor confidence and limit capital mobilization toward environmentally impactful projects. This study examines whether digitally embedded governance mechanisms can strengthen ESG enforcement and improve trust in emerging-market green bond markets. We define programmable governance as verification and enforcement rules embedded directly into financial contract execution, so that compliance triggers and disbursement conditions are evaluated automatically against verified inputs rather than through ex-post discretionary review. Using a Design Science Research approach, we develop a programmable ESG governance framework that links environmental performance verification to conditional financial disbursement through smart contract logic. The framework integrates real-time monitoring, auditable compliance triggers, and role-specific interfaces to operationalize ESG accountability within the bond lifecycle. To assess behavioral responses to such governance infrastructure, we conduct a discrete-choice experiment with 62 financially literate participants, examining investment selection and stated yield sensitivity across alternative governance regimes. The results indicate that bonds incorporating verifiable, contract-embedded governance mechanisms are selected more frequently and are associated with lower stated yield requirements within the experimental setting, with the effect strongest among participants reporting lower prior trust in issuer-country regulatory institutions—indicating that programmable governance is most valued where institutional weakness is greatest. These findings provide behavioral evidence on the monitoring-cost channel of cross-border green bond home bias, suggesting that programmable governance can complement weak institutional enforcement by improving perceived credibility, reducing information asymmetry, and strengthening the monitorability of ESG commitments—while remaining dependent on legal and regulatory institutions for dispute resolution and accountability. This study contributes by integrating governance design with behavioral evaluation in a single empirical framework, distinguishing it from prior blockchain-based green bond research that has addressed these dimensions separately.
Board-level ESG committees are increasingly used to formalize corporate sustainability governance, yet formalization does not ensure implementation. Existing research mainly evaluates disclosure, ESG ratings, and other favorable sustainability outcomes, and it remains unclear whether these committees are associated with changes in regulator-confirmed environmental noncompliance. Using Chinese A-share listed firms from 2010 to 2023 and a staggered difference-in-differences framework, this study examines whether committee establishment is followed by lower environmental penalties. The negative post-establishment relationship remains across specifications addressing treatment timing, observable selection, reverse causality, and potential self-selection. Mechanistic evidence points to two complementary forms of implementation: green innovation expands firms’ technical capacity to meet environmental requirements, whereas internal control quality strengthens risk identification, responsibility allocation, and corrective execution; the former explains only a limited share of the overall relationship. CEO duality provides marginal evidence of a weaker association, while analyst attention is associated with a stronger relationship. The findings suggest that the relevance of an ESG committee lies less in its formal presence than in its connection to organizational processes that translate sustainability concerns into compliance action. In China, where committee establishment is largely voluntary but environmental enforcement is externally imposed, the evidence is also consistent with internal ESG governance and external regulatory discipline operating as complements.
Environmental, social, and governance (ESG) performance serves not only as a response to urgent climate risks but also as a strategic tool for sustainable value creation. However, the rise in greenwashing suggests gaps in existing governance frameworks. This study examines the Fair Competition Review System (FCRS), a policy aimed at mitigating administrative monopolies by emphasizing market mechanisms. Unlike prior research that focuses primarily on firm‐level factors or macroeconomic interventions, this study situates FCRS within the framework of new institutional economics, constructing a causal chain from institutional pressures to corporate responses. Empirical results demonstrate that the FCRS significantly drives ESG behavior. Mechanism analysis identifies three key pathways: stimulation of green innovation, reduction of financing costs, and optimization of income distribution, each grounded in reduced institutional transaction costs. Further analysis underscores the importance of synergistic governance and highlights several factors that enhance policy effectiveness, including equity incentive systems, audit committees, regional rule‐of‐law environments, and digital infrastructure. A particularly novel finding is that identical external institutional pressures can lead to both substantive ESG implementation and strategic brownwashing, a phenomenon previously underexplored. This study extends the scope of institutional economics and refines the framework for understanding ESG performance drivers. Practically, it offers policymakers and enterprise leaders a roadmap for leveraging institutional pressures to achieve sustainable competitive advantages.
Zhen Wang· Business Ethics, the Environ...· 0 citations
As sustainable development reshapes capital market expectations, aligning executive incentives with long-term ESG outcomes has become a pressing governance challenge. Using a sample of Chinese A-share listed firms from 2013 to 2023, we find that implementing compensation clawback provisions with explicit environmental and safety triggers significantly improves corporate ESG performance. Facing concrete pay-recovery threats, executives become more risk-averse, as reflected in higher cash holdings, lower investment volatility, and fewer environmental penalty events, proactively curbing compliance violations to avoid triggering provisions. This effect is amplified by broader analyst coverage and higher independent director attendance rates, confirming that internal and external oversight work in coordination. Further analyses reveal stronger effects among non-state-owned enterprises and pollution-intensive industries. These findings suggest that expanding clawback trigger scope beyond financial restatements and strengthening complementary disclosure practices offer actionable pathways to embed sustainability into executive accountability frameworks.
As nuclear energy re-emerges as a key component of global decarbonization, its long-term sustainability increasingly depends on institutional legitimacy alongside technical performance. Drawing on institutional theory, sociotechnical systems theory, and energy justice scholarship, this study conceptualizes regulatory compliance as a governance-mediated outcome shaped by trust, equity, transparency, and inclusion (TETI). Building on the Q-NPT (Qudrat-Ullah Nuclear Peace and Trust) framework, a sequential explanatory mixed-method design develops a composite TETI Governance Index using structured coding of regulatory documents, international peer-review findings, and participatory governance practices across ten advanced and emerging nuclear programs. The index enables comparative assessment of governance quality through standardized indicators and aggregation of the four governance dimensions. Comparative analysis across the ten programs reveals systematic governance differences between advanced and emerging nuclear systems, with more institutionally mature programs generally exhibiting higher TETI scores and stronger regulatory compliance. Results suggest that governance systems characterized by greater transparency, equity, stakeholder inclusion, and institutional trust are associated with stronger regulatory compliance and institutional resilience. Regression analysis indicates a positive relationship between the TETI Governance Index and compliance performance, although the small comparative sample and proxy measures preclude causal inference. By reframing regulatory compliance as a governance-mediated sociotechnical outcome, this study advances a theoretically grounded framework for strengthening safe, equitable, and sustainable civilian nuclear energy governance.
The transition to a low-carbon global economy requires an estimated multi-trillion-dollar reallocation of capital toward renewable energy, clean technology, and climate-resilient infrastructure, yet the flow of private capital into sustainable investment vehicles remains constrained by informational, regulatory, and behavioral frictions. This study investigates the challenges and opportunities shaping the financing of the green transition, examining the determinants of investor willingness to allocate capital to sustainable investment instruments such as green bonds, ESG-themed funds, and renewable energy project finance. Anchored in Behavioral Finance Theory, Stakeholder Theory, and Signalling Theory, the study proposes and tests a structural model in which Green Financial Literacy, Policy and Regulatory Support, and ESG Disclosure Quality influence Sustainable Investment Decisions, with Investor Trust and Perceived Financial Risk serving as mediating mechanisms. Primary data were collected from a sample of 410 institutional and retail investors, financial analysts, and portfolio managers, selected through a stratified random sampling technique, using a structured questionnaire administered via a five-point Likert scale. The sample size was derived using Cochran's formula for large populations, adjusted for anticipated non-response. Data were analyzed using IBM SPSS Statistics v28 for descriptive and preliminary diagnostics, and SmartPLS 4 for Partial Least Squares Structural Equation Modelling (PLS-SEM), including measurement model assessment, bootstrapped mediation testing (5,000 resamples), and importance-performance map analysis (IPMA). Results reveal that ESG Disclosure Quality and Policy and Regulatory Support exert the strongest positive effects on Sustainable Investment Decisions, while Perceived Financial Risk, driven substantially by greenwashing concerns and regulatory uncertainty, exerts a significant negative effect that is partially offset by Investor Trust. The measurement model demonstrated satisfactory convergent and discriminant validity (AVE > 0.50; HTMT < 0.85), and the structural model achieved acceptable predictive relevance (Q2 > 0). The findings offer actionable insights for policymakers, financial institutions, and corporate issuers seeking to mobilize private capital at the scale required to finance the global green transition.
Subhadra P. S., V. N, C. Vilvijayan et al.· Adolescência e Saúde· 0 citations
The majority of existing sustainability‐linked bonds and loans utilize a pricing‐based approach in order to link the terms of the financing to an issuer's environmental, social and governance (ESG) performance. However, from a governance perspective, such an approach suffers from a critical weakness. When an issuer fails to meet its sustainability targets, its decision‐making rights are typically not affected, which creates the risk of ESG moral hazard and greenwashing. This study develops the concept of sustainability‐linked convertibles (SLC) as a conceptual governance mechanism. From a mechanism design perspective, the SLC is conceptualized as a state‐contingent governance mechanism that is based on an incomplete contracting approach. Under an SLC, the failure of an issuer to meet its ESG targets triggers cash‐flow penalties and also allows investors to obtain control rights through conversion. Relational monitoring between issuers and investors can also be incorporated into the terms of an SLC. The SLC therefore has the potential to strengthen the credibility of an issuer's sustainability commitments and also to serve as a conceptual governance mechanism that can distinguish between an issuer that is engaged in a genuine transition to sustainability and one that is merely signaling its commitment to ESG.
