Jul 2026· Intraders international trade academic journal· Vol 9, pp. 90-106· 0 citations· 40 references
Abstract
In light of the current climate crisis, sustainable development has become a strategic element of economic policies. This has led to the step of green finance instead of traditional financial methods, adopting an approach based on environmental, social, and governance (ESG) standards. In this context, this study examines the effects of environmental protection (ESG) on green finance. The analysis covers seven countries (Australia, Belgium, France, Germany, Ireland, Netherlands, and Sweden) that scored 85 points or higher in the ISESG 2025 global ESG ranking and covers the period 2002–2021. The cointegration test of Westerlund and Edgerton is utilized in the study. Long-term coefficients are then obtained through AMG and rCCE estimators. Green finance is measured by the share of environmental protection expenditures in GDP, while ESG uncertainty (ESGUI), inflation, and financial development are included in the model. The analysis results reveal a long-term relationship between the variables and significant heterogeneity among countries. The findings display that ESG uncertainty negatively affects green finance in Ireland and Sweden, but positively affects it in Belgium. Inflation has a negative impact on green finance only in Germany, while the supportive role of financial development is found in Ireland and the Netherlands. Therefore, analyses reveal that high ESG performance alone does not guarantee the stability of green finance, and that ESG uncertainty plays a decisive role in this process. This study is the first to directly examine the empirical relationship between country-based ESGUI and green finance, focusing on the group of countries with the highest ESG scores.
Recent challenges in climate variation have emerged as a substantial concern for international communities. Presently, climate finance (CF) has emerged as a viable solution for mitigating climate change. CF, as a distinctive form of international support, seeks to foster sustainable development while concurrently enhancing CO
2
emissions. Therefore, the present study aims to estimate the impact of CF, green technological innovation (GTECH), economic policy uncertainty (EPC), and business freedom (BFD) on environmental sustainability (ES) from 2000 to 2023 for the N11 states (excluding South Korea due to unavailable data). Moreover, the moderation models are inspected for CF, GTECH, EPC, and BFD. However, theoretical support has aligned with the sustainable innovation perspective and the Sustainable Development Goals (SDG 9 and SDG 13). However, the integrated econometric estimates are carried out using the cross-sectional auto-regressive distributive lag technique, the methods of moments of quantile regression, and robustness verification via FMOLS and DOLS estimates. The findings showed that CF (−0.008) aids ES in the short term, while existing CF aids (0.019) are insufficient for supporting long-term ES. In parallel, GETCH (−0.077) and BFD (−0.183) contribute to enhancing ES. Similarly, EPC benefits the short term, but has destructive impacts on ES (1.510) in the long term. Interestingly, the moderation effects of CF*GTECH and CF*BFD aid ES at both short and long spans, while CF*EPC degrades ES. Consequently, a robust policy mechanism is required to regulate CF, and CF aid needs to be increased for developing states that benefit ES in the long term.
Hua-Ming Song, Arsalan Tanveer, Abdul Daud et al.· Energy & Environment· 0 citations
This study examines the impact of environmental, social and governance (ESG) performance on financial risk in Jordan, measured through the lending–deposit spread.
A new ESG index and three pillar indices are constructed using annual data from 1990 to 2024. The quantile autoregressive distributed lag (QARDL) model is applied to capture both short- and long-run effects across different states of financial risk.
ESG improvements lower spreads, with the strongest effects during stress periods. Governance emerges as the most influential pillar, followed by environmental progress, while social outcomes show weaker and less consistent effects. Macroeconomic fundamentals, income, inflation and debt, remain important but are complemented by ESG factors.
For Jordan, credible governance reform and accelerated energy transition are the most effective strategies for reducing financing costs, while social investment remains vital for long-term sustainability.
This study advances the ESG–sovereign risk debate in three ways. First, it constructs a novel ESG index for Jordan with distinct ESG pillars, addressing the lack of detailed ESG data for small emerging economies. The index integrates international and national sources to ensure transparency and replicability. Second, it applies the QARDL model to sovereign bond spreads, capturing asymmetric effects of ESG factors across market conditions. Third, results reveal that stronger governance and environmental performance significantly narrow sovereign spreads, especially during periods of financial stress, highlighting ESG’s stabilizing role in emerging economies.
H. Alqaralleh· Journal of economic and admi...· 0 citations
This study aims to explore the role of green finance in achieving a cleaner environment. More specifically, it examines the short- and long-run impacts of green finance on environmental degradation.
This study uses balanced panel data for a selected set of seven BRICS + nations, covering 2000–2023. It uses a panel Autoregressive Distributed Lag (ARDL) or a pooled mean group (PMG) model to assess the impact of green finance on ecological footprint (EFP). The panel ARDL model provides long- and short-run coefficients and an error-correction term, clearly showing the dynamics of the relationship between green finance and environmental sustainability.
The findings reveal that green finance significantly and negatively affects the EFP in the long run, but has no such impact in the short run. As green finance supports environmentally friendly investments in an economy, it can reduce harmful environmental emissions over time, but because these projects require longer gestation periods, the beneficial impact on the environment does not appear in the short run.
Green finance plays a crucial role in the green transformation of the financial system by promoting environmentally friendly investments. Green finance instruments such as green bonds, sustainability-linked loans and carbon credit financing are valuable for financing environmentally friendly projects and reducing EFPs.
This study adds to existing literature on green finance by exploring its impact on EFP. Research on this field is relatively scarce in the existing literature for BRICS+.
Farah Hussain, M. Gogoi, Nabashree Kalita· Studies in Economics and Fin...· 0 citations
In today's world, sustainability strategies play a critical role in the transformation of global economies and industries. Green Economic Growth (GEG), which prioritizes environmental factors, is gaining increasing importance. Financial and green innovation are identified as the main driving forces behind GEG. However, research on the effects of these factors in OECD countries remains limited, and existing findings often show inconsistencies regarding the direction and magnitude of these effects. This study aims to comprehensively examine the impact of financial and green innovation on GEG in OECD countries. Using annual data from 15 OECD countries for the period 1996–2021, panel data techniques are applied. Cointegration tests are conducted to determine the presence of long-run relationships among the variables. Subsequently, long-run coefficients are estimated using the panel quantile regression method. The robustness of the findings is tested through OLS and fixed effects models. Additionally, causality tests are employed to explore the directional relationships between the variables. The results indicate that green innovation has a positive long-run effect on GEG, whereas financial innovation exerts a negative impact. Causality tests reveal bidirectional relationships among all variables. Policy recommendations include the promotion of green bonds and sustainable finance instruments, support for green investments through regulations that take environmental risks into account, and the expansion of access to green projects via technologies such as blockchain-based carbon markets. This research provides valuable insights for policymakers in designing more effective strategies to foster sustainable economic growth.
H. G. Diler, Münevver Yildiz, N. Vurur et al.· Tesam akademi dergisi· 0 citations
This study investigates the relationship between Environmental, Social, and Governance (ESG) performance and bank financial stability within the context of the green finance transition. Utilizing an unbalanced panel dataset of 251 banks across 56 countries, observed over the period 2009–2024, we analyze how this relationship is moderated by the share of green financial products in the bank's total product portfolio and by the quality of the institutional environment, as captured by the Rule of Law (RoL) index. Our estimations reveal that while ESG is generally positively associated with bank stability, measured by the
Z
‐Score, this stabilizing effect weakens as the share of green products increases, confirming a substitution effect. This mechanism is moderated by the institutional environment. In developed economies, the RoL acts as a substitute for sustainability strategies, reducing their marginal stabilizing impact. In contrast, in emerging economies it functions as a complement, strengthening the joint stabilizing impact of ESG performance and green financial products. These findings have important implications for global banking regulators and managers, emphasizing the need to make strategic trade‐offs between sustainability ambitions and financial resilience while accounting for cross‐country differences in institutional quality.
Imen Fakhfakh, Amal Ghribi, Soulef Smaoui· Thunderbird International Bu...· 1 citation
This study reveals the impact of GDP per capita, trade openness, renewable energy and technology on financial development in the world's most developed countries for the period of 1990-2021. In this context, this study especially focused on whether environmental technologies and renewable energy support financial development. Driscoll-Kraay Panel regression analysis is used to estimate panel data in this study. In addition, panel quantile regression analysis is performed to determine the coefficients of the variables at different quantile. The long-run results are authenticated using panel fully modified ordinary least square (FMOLS), dynamic ordinary least square (DOLS) and canonical cointegration regression (CCR). It is concluded that increases in renewable energy consumption and environment-related technology reduce financial development in the long-run. Although many studies found that financial development has positive effects on renewable energy consumption, the feedback effect is negatively in G7 countries to current study. In other words, policy incentives should be provided to return the productive resources created by financial instruments used in renewable energy investments back to the financial system and balance financial growth between environmental sustainability. The results suggest that financial markets should be regulated to obtain the positive effects of environmentally friendly investments. In this respect, this study signals that we have entered a period in which financial markets need to be reorganized.
Gülbahar Atasever· Environmental Research and T...· 0 citations
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