Sustainable and Green Finance

Topic Information

Dear Colleagues,

We are pleased to invite you to submit your research for the Topic titled “Sustainable and Green Finance”. As the world faces increasing environmental challenges, the importance of aligning financial systems with sustainability goals has never been greater. This Topic aims to explore innovative approaches, strategies, and policies that can contribute to building a greener and more sustainable financial system.

The financial sector plays a crucial role in supporting the transition toward a more sustainable economy. By allocating capital to environmentally responsible projects, promoting green investments, and developing sustainable financial products, it can help address pressing issues such as climate change, resource depletion, and social inequality. We seek high-quality research that will deepen our understanding of how sustainable and green finance can contribute to the global effort toward achieving long-term environmental, social, and governance (ESG) goals.

This Topic aims to address the evolving landscape of sustainable and green finance. We welcome both theoretical and empirical contributions that explore the various aspects of sustainable financial practices, policies, and instruments. Our goal is to foster discussions on how financial systems can support the transition to low-carbon economies and integrate sustainability principles into investment decisions, risk management, and corporate governance.

The scope covers a wide range of topics related to sustainable finance, including the development of green financial instruments, the role of regulatory frameworks, the impact of ESG factors on financial performance, and the design of sustainable investment strategies. We are particularly interested in studies that offer actionable insights into how financial markets can facilitate environmental sustainability and social responsibility, ensuring a fair transition to a more resilient economy.

Key areas of interest include, but are not limited to, the following:

• green bonds, green loans, and other sustainable financial products;
• ESG integration in financial decision-making and asset pricing;
• regulatory frameworks and policies promoting sustainable finance;
• climate finance and funding mechanisms for low-carbon transitions;
• the role of central banks and financial institutions in fostering sustainability;
• risk assessment, reporting, and disclosure of ESG risks;
• impact investing and socially responsible investment strategies;
• technological innovations (e.g., blockchain) supporting sustainable finance;
• corporate sustainability, governance, and stakeholder engagement;
• financial inclusion and sustainable development in emerging markets.

We look forward to receiving your valuable contributions to this important topic and to advancing the discussion on how finance can contribute to a more sustainable and equitable future.

Prof. Dr. Otilia Manta
Dr. Maria Palazzo
Topic Editors

Keywords

Participating Journals

Journal Name	Impact Factor	CiteScore	Launched Year	First Decision (median)	APC
Businesses businesses	-	-	2021	22.3 Days	CHF 1000	Submit
Economies economies	2.3	5.2	2013	23.3 Days	CHF 1800	Submit
International Journal of Financial Studies ijfs	2.7	5.0	2013	20.4 Days	CHF 1800	Submit
Journal of Risk and Financial Management jrfm	-	5.5	2008	18.3 Days	CHF 1600	Submit
Sustainability sustainability	4.1	8.9	2009	16.9 Days	CHF 2400	Submit

Preprints.org is a multidisciplinary platform offering a preprint service designed to facilitate the early sharing of your research. It supports and empowers your research journey from the very beginning.

MDPI Topics is collaborating with Preprints.org and has established a direct connection between MDPI journals and the platform. Authors are encouraged to take advantage of this opportunity by posting their preprints at Preprints.org prior to publication:

1. Share your research immediately: disseminate your ideas prior to publication and establish priority for your work.
2. Safeguard your intellectual contribution: Protect your ideas with a time-stamped preprint that serves as proof of your research timeline.
3. Boost visibility and impact: Increase the reach and influence of your research by making it accessible to a global audience.
4. Gain early feedback: Receive valuable input and insights from peers before submitting to a journal.
5. Ensure broad indexing: Web of Science (Preprint Citation Index), Google Scholar, Crossref, SHARE, PrePubMed, Scilit and Europe PMC.

Published Papers (23 papers)

Order results

Content type Publication Date

Result details

Normal Extended Compact

Journals

All Economies IJFS Sustainability Businesses JRFM

Show export options expand_more Show export options expand_less

Select all

Export citation of selected articles as:

Plain Text BibTeX BibTeX (without abstracts) Endnote Endnote (without abstracts) Tab-delimited RIS

Error

Oops... you haven't selected anything for export.

Ok

clear

44 pages, 465 KB  

Open AccessArticle

ESG Improvement and Financial Performance Trade-Offs: A Cross-Country Cultural Perspective

by Su Xing, Ruohan Wang, Sange Li and Yajuan Liu

Sustainability 2026, 18(17), 8823; https://doi.org/10.3390/su18178823 - 28 Aug 2026

Viewed by 467

Abstract

Against the backdrop of global sustainability transitions and the growing importance of ESG investing, firms face increasing trade-offs between short-term financial objectives and long-term ESG commitments. While previous studies have mainly examined how ESG performance affects financial outcomes, less attention has been paid [...] Read more.

Against the backdrop of global sustainability transitions and the growing importance of ESG investing, firms face increasing trade-offs between short-term financial objectives and long-term ESG commitments. While previous studies have mainly examined how ESG performance affects financial outcomes, less attention has been paid to whether financial performance influences subsequent ESG strategies and how the national culture shapes this relationship. Drawing on the resource-based view and Hofstede’s cultural dimensions theory, this study employs cross-country firm-level panel data and logistic regression models to examine whether prior-year financial performance target achievement promotes subsequent ESG improvement. The results show that firms achieving their financial targets are significantly more likely to improve ESG performance in the following year, suggesting that financial success provides the resources needed to support ESG investment. Moreover, the effect varies across national cultural contexts, highlighting the moderating role of cultural heterogeneity. By examining the reverse pathway from financial performance to ESG, this study extends the conventional ESG–financial performance literature and provides new evidence of the dynamic interaction between financial objectives and ESG strategies. These findings also contribute to understanding how national culture influences corporate sustainability decisions and strategic resource allocation. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

22 pages, 2283 KB  

Open AccessArticle

Boost or Burden: How Does Green Finance Affect the Dual Security of Food and Ecology?

by Chang-Song Wang

Sustainability 2026, 18(17), 8785; https://doi.org/10.3390/su18178785 - 27 Aug 2026

Viewed by 187

Abstract

Amid rising population pressure, heightened volatility in international markets, and increasingly binding domestic resource and environmental constraints, safeguarding food security while maintaining ecological security has become a salient policy and academic concern in China. Within this context, our study investigates whether and how [...] Read more.

Amid rising population pressure, heightened volatility in international markets, and increasingly binding domestic resource and environmental constraints, safeguarding food security while maintaining ecological security has become a salient policy and academic concern in China. Within this context, our study investigates whether and how green finance contributes to the dual security of food and ecology. Building on a theoretical analytical framework, we elaborate on the functional role of green finance and empirically assess its effects using provincial panel data from China. We construct a composite index to gauge the level of green finance development and then employ a two-way fixed-effects model with province and year fixed effects to identify the overall impact of green finance, followed by a mediation model to uncover the underlying transmission mechanisms and sub-sample regressions to examine heterogeneity. The empirical evidence indicates that, while green finance significantly improves the dual security of food and ecology, substantial heterogeneity is observed, with stronger effects in southern regions, major grain-producing functional areas, and plain regions. Mechanism analyses further show that green finance advances dual security through three primary channels of agricultural structure adjustment, planting specialization, and agricultural green technological innovation, among which shifts in agricultural production structure, greater centralization of planting, and enhanced agricultural green innovation capacity constitute the dominant transmission mechanisms. By integrating food security and ecological security within a unified framework, we clarify the multidimensional pathways through which green finance supports sustainable agricultural development and provide new empirical evidence on how financial instruments can reconcile production and environmental objectives. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

30 pages, 431 KB  

Open AccessArticle

Related Party Sales and Earnings Management: The Moderating Role of Institutional Ownership—Single and Dispersed

by Zulkifli Umar, Muhammad Arfan, Islahuddin Islahuddin and Mulia Saputra

Int. J. Financ. Stud. 2026, 14(7), 184; https://doi.org/10.3390/ijfs14070184 - 10 Jul 2026

Viewed by 678

Abstract

This study aims to examine the relationship between related party sales (RPS) and earnings management (EMN), as well as to investigate the moderating effects of institutional ownership (IO), single institutional ownership (SIO), and dispersed institutional ownership (DIO) on this relationship. This study examines [...] Read more.

This study aims to examine the relationship between related party sales (RPS) and earnings management (EMN), as well as to investigate the moderating effects of institutional ownership (IO), single institutional ownership (SIO), and dispersed institutional ownership (DIO) on this relationship. This study examines non-service and non-financial firms listed on the Indonesia Stock Exchange during the 2016–2024 period. The sample selection included firms with IO and RPS. The final sample consisted of 68 firms (585 firm-year observations) out of a total of 601 firms and was analyzed using moderated regression with unbalanced panel data. The findings indicate that RPS has a positive effect on EMN. IO weakens the positive effect of RPS on EMN. However, in the group consisting only of SIO, the positive effect of RPS on EMN becomes stronger. In contrast, in the DIO group, DIO is unable to moderate the relationship. Furthermore, EMN in firms engaging in RPS with parent firms does not differ from EMN in firms engaging in RPS with non-parent related parties. Finally, we conclude that, in the Indonesian context, RPS provides opportunities for management to engage in opportunistic behavior. The presence of SIO may increase earnings management, whereas DIO is unable to mitigate earnings management. Full article

(This article belongs to the Topic Sustainable and Green Finance)

18 pages, 383 KB  

Open AccessArticle

Does Green Finance Promote Green Development? Examining the Mechanisms of Green Innovation and Environmental Decentralization

by Xueya Hu and Zhixiang Yang

Sustainability 2026, 18(12), 6339; https://doi.org/10.3390/su18126339 - 21 Jun 2026

Viewed by 542

Abstract

This study examines whether green finance promotes green development across Chinese prefecture-level cities from 2005 to 2019. We find a positive association between green finance and green development using panel regressions with city and year fixed effects. This result remains robust after accounting [...] Read more.

This study examines whether green finance promotes green development across Chinese prefecture-level cities from 2005 to 2019. We find a positive association between green finance and green development using panel regressions with city and year fixed effects. This result remains robust after accounting for potential endogeneity and implementing a series of robustness checks. Further heterogeneity analysis shows that this positive effect is stronger in regions characterized by high fiscal capacity and within the Yangtze River Economic Belt. Additionally, green finance drives regional green development by promoting green innovation. Environmental decentralization moderates the relationship, with a stronger positive effect at higher levels of decentralization. This study offers empirical evidence regarding how green finance shapes green development outcomes. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

22 pages, 612 KB  

Open AccessArticle

Market Signals and Investor Behavior in Green Bond Pricing: Evidence from China

by Xinyan Deng, Kentaka Aruga, Yoshihiro Zenno, Mengge Li, Yue Ban and Chaofeng Tang

Economies 2026, 14(6), 227; https://doi.org/10.3390/economies14060227 - 12 Jun 2026

Viewed by 986

Abstract

This study examines how green bond financing costs in China are jointly shaped by market pricing mechanisms and institutional investor behavior. It develops an integrated two-level framework linking issuance-level bond characteristics with investor decision-making to explain green bond pricing in an emerging market. [...] Read more.

This study examines how green bond financing costs in China are jointly shaped by market pricing mechanisms and institutional investor behavior. It develops an integrated two-level framework linking issuance-level bond characteristics with investor decision-making to explain green bond pricing in an emerging market. Using a comprehensive dataset of Chinese green bond issuances, the results show that financing costs are driven mainly by conventional credit-related signals, including issuer and bond ratings, guarantee structures, issuance size, and maturity. However, market frictions such as liquidity constraints and rating inertia weaken the capitalization of environmental attributes in yields. A survey-based Logit analysis of institutional investors in Shanghai further shows that green bond investment is influenced more by trading activity, information transparency, and risk management than by environmental awareness alone. Institutional heterogeneity also suggests that securities firms display stronger participation than investment companies, reflecting differences in bond-market exposure, product familiarity, and institutional investment mandates. Overall, the findings reveal a feedback mechanism in which market signals shape investor behavior, which in turn reinforces or moderates pricing dynamics. The study clarifies the structural and behavioral drivers of green bond pricing and offers policy implications for improving transparency, liquidity, and investor incentives. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

25 pages, 476 KB  

Open AccessArticle

Enhancing Investor Trust Through Sustainable Finance: The Moderating Effects of Regulatory Quality and Economic Policy Uncertainty Among Non-Financial Institutions Listed on the London Stock Exchange

by Jeneba Joy Tucker, Murad Abdurahman Bein, Bright Akwasi Gyamfi and Richard Arhinful

Sustainability 2026, 18(11), 5700; https://doi.org/10.3390/su18115700 - 4 Jun 2026

Cited by 1 | Viewed by 755

Abstract

The regulatory framework in the United Kingdom plays a vital role in promoting investor trust and transparency by mandating that enterprises disclose their social and environmental impacts. This makes the UK an appropriate setting for this study. This research examined how sustainable finance [...] Read more.

The regulatory framework in the United Kingdom plays a vital role in promoting investor trust and transparency by mandating that enterprises disclose their social and environmental impacts. This makes the UK an appropriate setting for this study. This research examined how sustainable finance influences investor trust in the London Stock Exchange. The study employed purposive sampling along with specified inclusion and exclusion criteria to assess 17 years of data (2007–2023) from 334 non-financial institutions obtained from Thomson Reuters Eikon DataStream. To mitigate cross-sectional dependence and endogeneity concerns in the data, several estimation methods were used, including the Common Correlated Effects Mean Group (CCEMG), fixed effects with Driscoll-Kraay standard errors, and the Generalized Method of Moments (GMM). The findings revealed that corporate emission reduction policies, environmental expenditures, and green bond issuances had a positive and significant impact on investor trust. Additionally, the moderating effect of regulatory quality on emission reduction policies further enhanced investor trust. Based on these findings, companies are encouraged to strengthen their environmental practices by implementing robust emission reduction policies, increasing environmental investments, and issuing green bonds to support sustainable projects. These efforts should be clearly communicated to investors to highlight the company’s commitment to sustainability and corporate responsibility. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

22 pages, 750 KB  

Open AccessArticle

A Judgement-Based Connectivity Framework Linking IFRS S2 Climate-Related Disclosures to IFRS Recognition, Measurement, and Disclosure Outcomes: An Illustrative Application

by Eda Oruç Erdoğan, Murat Erdoğan, Durmuş Acar and İlker Kıymetli Şen

J. Risk Financ. Manag. 2026, 19(6), 406; https://doi.org/10.3390/jrfm19060406 - 3 Jun 2026

Cited by 1 | Viewed by 1210

Abstract

Increasing attention has been directed toward the consistency between sustainability disclosures and financial statements, giving rise to the concept of financial connectivity. A prevailing assumption in this debate is that climate-related risks and opportunities will directly translate into quantifiable impacts on financial statement [...] Read more.

Increasing attention has been directed toward the consistency between sustainability disclosures and financial statements, giving rise to the concept of financial connectivity. A prevailing assumption in this debate is that climate-related risks and opportunities will directly translate into quantifiable impacts on financial statement amounts under International Financial Reporting Standards (IFRS). This study challenges that assumption by arguing that connectivity does not necessarily materialise through immediate recognition outcomes in financial statements. To address this gap, the paper develops a three-stage, judgement-based connectivity framework that links climate-related disclosures under IFRS S1 and IFRS S2 to recognition, measurement, and disclosure decisions under IFRS Accounting Standards. Rather than treating sustainability disclosures as direct valuation inputs, the framework evaluates each disclosed risk or opportunity through structured accounting judgements. The framework is illustrated using the 2024 climate-related disclosures of a listed manufacturing entity (Company A). The illustrative application suggest that significant climate exposures do not automatically result in recognised provisions under IAS 37. Instead, connectivity primarily operates through assumption-setting mechanisms embedded in existing measurement models, including impairment testing (IAS 36), asset life assessments (IAS 16), and deferred tax evaluations (IAS 12). The study makes three interrelated contributions: it reconceptualises financial connectivity as a structured judgement process rather than a numerical reconciliation exercise; it operationalises this reconceptualisation through a replicable step-by-step mapping framework that links IFRS S2 disclosures to specific IFRS recognition, measurement, and disclosure requirements without expanding existing accounting rules; and it clarifies that disciplined non-recognition may represent adherence to accounting integrity rather than a reporting deficiency. These contributions distinguish the framework from existing professional guidance by making the underlying judgement logic explicit and replicable within the scope of IFRS-based financial reporting. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

22 pages, 302 KB  

Open AccessArticle

Environmental Project Financing and Insolvency Risk: Moderating Effects of Public Relations Function and Climate Policy Uncertainty

by Faris Alzughaibi and Hamad Aldawsari

Sustainability 2026, 18(10), 5061; https://doi.org/10.3390/su18105061 - 18 May 2026

Viewed by 574

Abstract

Despite growing emphasis on financial firms’ engagement in environmental project financing (EPF), its impact on insolvency risk remains underexplored. Drawing on signaling theory, this study investigates how EPF influences financial institutions’ insolvency risk and examines the moderating roles of the existence of a [...] Read more.

Despite growing emphasis on financial firms’ engagement in environmental project financing (EPF), its impact on insolvency risk remains underexplored. Drawing on signaling theory, this study investigates how EPF influences financial institutions’ insolvency risk and examines the moderating roles of the existence of a public relations function and global climate policy uncertainty. By analyzing data of 291 financial firms from major developed economies over 2014–2023, this study finds that environmental project financing reduces insolvency risk. Furthermore, the presence of a public relations function strengthens this effect, while the rising global climate policy uncertainty weakens it. This study contributes to existing literature while offering both strategic insights and practical implications. Full article

(This article belongs to the Topic Sustainable and Green Finance)

45 pages, 5388 KB  

Open AccessArticle

Liquidity and Market Microstructure of Tokenized Carbon Assets Trading in Blockchain-Based Voluntary Carbon Markets: A Mean-Centered MMRM with HAC Corrections

by Sukmawati Sukamulya and Veronica Tri Kusuma

J. Risk Financ. Manag. 2026, 19(5), 331; https://doi.org/10.3390/jrfm19050331 - 3 May 2026

Viewed by 1736

Abstract

This study investigates how on-chain trading activity influences liquidity and market microstructure in blockchain-based voluntary carbon markets (VCMs) while accounting for the regulation index as a conditioning factor. Using mean-centered MMRM with HAC corrections on daily data for $KLIMA, BCT, and MCO2, the [...] Read more.

This study investigates how on-chain trading activity influences liquidity and market microstructure in blockchain-based voluntary carbon markets (VCMs) while accounting for the regulation index as a conditioning factor. Using mean-centered MMRM with HAC corrections on daily data for $KLIMA, BCT, and MCO2, the results indicate that liquidity is associated with distinct trading channels across tokens. Transaction value is positively associated with market depth, while fragmented trading intensity is associated with wider bid-ask spreads. Market expansion is further linked to higher price volatility, particularly in structurally thin markets. The regulation index predominantly acts as a homologizer moderator, reinforcing existing relationships rather than fundamentally altering their direction, with stronger conditioning effects observed in thinner markets. Overall, the findings suggest that liquidity in tokenized carbon markets is more closely associated with market microstructure, trading behavior, and token design than with underlying carbon asset fundamentals. By integrating on-chain trading metrics with macro-structural regulatory conditions in a high-frequency framework, this study provides new evidence on how liquidity emerges in decentralized carbon markets under heterogeneous structural constraints. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

attachment

Supplementary material:
Supplementary File 1 (ZIP, 13 KB)

24 pages, 622 KB  

Open AccessArticle

How Do IFRS S2 Climate Risks Affect IAS 36 Impairments? A Constructive Accounting Framework Calibrated to European Steel

by Khaled Muhammad Hosni Sobehy, Lassaad Ben Mahjoub and Sahbi Gabsi

J. Risk Financ. Manag. 2026, 19(4), 272; https://doi.org/10.3390/jrfm19040272 - 8 Apr 2026

Viewed by 2029

Abstract

A major connectivity gap arises from the misalignment between the forward-looking climate disclosures required by IFRS S2 and the historically rooted asset valuations mandated by IAS 36. This misalignment can cause the overvaluation of carbon-intensive assets and disrupt capital allocation decisions. This research [...] Read more.

A major connectivity gap arises from the misalignment between the forward-looking climate disclosures required by IFRS S2 and the historically rooted asset valuations mandated by IAS 36. This misalignment can cause the overvaluation of carbon-intensive assets and disrupt capital allocation decisions. This research specifically examines transition risks, such as carbon pricing, regulatory shocks, and technological disruption, and quantifies the financial externality using a combination of deterministic impairment testing and stochastic climate scenarios. We create a constructive framework and develop a model of a Synthetic Representative Firm, calibrated to major integrated steel producers in Europe. To generate nonlinear Green Swan shocks for Value-in-Use, the process combines Monte Carlo simulation with the Merton Jump-Diffusion model. This comparison shows the difference between the steady Management View and the volatile Market View. Empirical results reveal a material Sustainability Discount, representing a substantial erosion in the recoverable amount under IFRS S2 transition risk scenarios compared to the IAS 36 Deterministic Baseline. Simulations show a strong probability of asset stranding due to restricted cost pass-through, indicating that older assets may face elevated impairment risks under disorderly transition scenarios. Traditional deterministic models may not fully capture aspects of Double Materiality, potentially leaving balance sheets less responsive to transition risks. Integrating digitalization and the Circular Carbon Economy (CCE) framework presents a strategic method for averting value destruction. Therefore, this research supports the integration of stochastic transition risk modeling into impairment testing to achieve faithful financial representation. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Graphical abstract

32 pages, 1832 KB  

Open AccessArticle

The Effect of Green Credit Policies on Sustainable Innovation: Evidence and Mechanisms from China

by Jue Wang, Xiao Sun and Wanxia Qi

Sustainability 2026, 18(2), 784; https://doi.org/10.3390/su18020784 - 13 Jan 2026

Cited by 3 | Viewed by 1549

Abstract

This study examines how green credit policies, specifically the green credit guidelines (GCGs) implemented in 2012, influence corporate sustainable innovation. This study employs a quasi-natural experiment approach, utilizing data from Chinese listed companies between 2005 and 2023, to examine the differential impact of [...] Read more.

This study examines how green credit policies, specifically the green credit guidelines (GCGs) implemented in 2012, influence corporate sustainable innovation. This study employs a quasi-natural experiment approach, utilizing data from Chinese listed companies between 2005 and 2023, to examine the differential impact of the GCGs on high-polluting enterprises versus energy-efficient enterprises. The study uses a Difference-in-Differences (DID) methodology to explore how policy-induced changes in financing conditions affect firms’ innovation behaviors, particularly in terms of green patent applications. This study uses a mechanism to understand the role of R&D investment and access to long-term financing in driving these changes. And this study considers heterogeneity across firm ownership types and industry competition to investigate the varying effects of the GCGs. By identifying the causal pathways through which green credit policies influence innovation, this study contributes to the understanding of how environmental policies shape corporate behavior and innovation outcomes. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

24 pages, 1418 KB  

Open AccessReview

A Review of Gender-Inclusive Green Microfinance Business Models in Tunisia: A Business Model Canvas Perspective

by Nadia Mansour

Int. J. Financ. Stud. 2026, 14(1), 19; https://doi.org/10.3390/ijfs14010019 - 9 Jan 2026

Cited by 1 | Viewed by 1729

Abstract

This paper presents a systematic review of Tunisian stakeholders’ perceptions of integrating gender into green microfinance business models, analyzed through the lens of the Business Model Canvas (BMC). This systematic review of 32 studies indicates a dual perception of women as both vulnerable [...] Read more.

This paper presents a systematic review of Tunisian stakeholders’ perceptions of integrating gender into green microfinance business models, analyzed through the lens of the Business Model Canvas (BMC). This systematic review of 32 studies indicates a dual perception of women as both vulnerable victims and active agents in the ecological transition. The BMC-based analysis reveals major weaknesses in the value proposition, distribution channels, and cost structures of gendered green microfinance offerings. Furthermore, we highlight the underexplored role of regulatory frameworks as levers for business model innovation. This study offers an original analytical framework that links gender, environmental sustainability, and microfinance business models, providing actionable insights for policymakers and microfinance institutions seeking to foster inclusive and sustainable financial ecosystems in Tunisia and similar contexts. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

26 pages, 3813 KB  

Open AccessArticle

Deep Learning for the Greenium: Evidence from Green Bonds, Risk Disclosures, and Market Sentiment

by Meryem Raissi, Abdelhadi Darkaoui, Souhail Admi and Hind Bouzid

J. Risk Financ. Manag. 2025, 18(12), 717; https://doi.org/10.3390/jrfm18120717 - 16 Dec 2025

Viewed by 1690

Abstract

This study examines how physical and transition climate risks affect the greenium, assuming that implied volatility serves as a proxy for investor sentiment generated by these risks. Applying a Gated Recurrent Unit (GRU) deep learning model to daily data from January 2020 to [...] Read more.

This study examines how physical and transition climate risks affect the greenium, assuming that implied volatility serves as a proxy for investor sentiment generated by these risks. Applying a Gated Recurrent Unit (GRU) deep learning model to daily data from January 2020 to June 2025 with a rigorous train–test split to get around the drawbacks of full-sample estimations and guarantee strong out-of-sample generalizability is a significant empirical contribution. Our findings show that adding the interaction between these climate risks and the sentiment proxy slightly increases predictive power. The GRU model outperforms random forest and linear regression benchmarks in terms of generalizability, but it remains sensitive to different data splits and hyperparameter tuning. This highlights the use of complex, non-linear models for risk forecasting and portfolio allocation for investors and risk managers, as well as the need for regular climate disclosure for policymakers to reduce information asymmetry. The GRU’s stringent validation framework directly enables more reliable pricing and exposure management. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

24 pages, 388 KB  

Open AccessArticle

The Determinants of Green Bond Issuance in Indonesia: An Analysis of Sustainable Financial Instruments

by Endri Endri, Irwan Mangara Harahap and Anton Hindardjo

J. Risk Financ. Manag. 2025, 18(12), 672; https://doi.org/10.3390/jrfm18120672 - 26 Nov 2025

Cited by 4 | Viewed by 4113

Abstract

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 [...] Read more.

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. Full article

(This article belongs to the Topic Sustainable and Green Finance)

22 pages, 1090 KB  

Open AccessArticle

The Impacts of Green Finance Reforms on Urban Energy Efficiency in China

by Weijia Shao and Weiming Sun

Sustainability 2025, 17(21), 9678; https://doi.org/10.3390/su17219678 - 30 Oct 2025

Viewed by 1313

Abstract

To evaluate the effectiveness of green finance, this study treats China’s green finance reform and innovation pilot zones as a quasi-natural experiment to assess their impact on urban energy efficiency. This research utilizes a panel dataset of 282 Chinese prefecture-level cities from 2010 [...] Read more.

To evaluate the effectiveness of green finance, this study treats China’s green finance reform and innovation pilot zones as a quasi-natural experiment to assess their impact on urban energy efficiency. This research utilizes a panel dataset of 282 Chinese prefecture-level cities from 2010 to 2023 and employs a multi-period difference-in-differences (DID) model. The core dependent variable, urban green total factor energy efficiency (UGTFEE), is quantified using a non-radial Slack-Based Measure (SBM) efficiency model combined with the Malmquist-Luenberger index. The empirical findings reveal four key points. First, the green finance pilot zones significantly enhance UGTFEE, with policy-affected cities demonstrating an average improvement of approximately 2.0% relative to non-pilot cities. Second, this positive impact is transmitted through two primary mechanisms: the advancement of green technology research and development and the deepening of financial market development. Third, the policy’s effectiveness is heterogeneous, varying according to regional characteristics such as geographical location, environmental regulation stringency, and resource endowments. Finally, a negative spatial spillover is identified, wherein the policy creates a siphoning effect that competitively suppresses the UGTFEE of neighboring cities. These findings provide critical theoretical insights and empirical evidence for optimizing green finance initiatives, thereby facilitating urban industrial transformation toward greater green energy efficiency. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

27 pages, 337 KB  

Open AccessArticle

Building Sustainable Financial Capacity: How Supply Chain Digitalization Facilitates Credit Access by Adjustment Capability

by Fan Wu and Kaifeng Duan

Sustainability 2025, 17(20), 9265; https://doi.org/10.3390/su17209265 - 18 Oct 2025

Cited by 4 | Viewed by 2146

Abstract

In the context of the deep restructuring of the global industrial chain and the concurrent pursuit of green and sustainable development, enterprises need to secure long-term, reliable supply chain competitiveness. The burgeoning wave of digitalization is simultaneously reshaping industry landscapes. Based on a [...] Read more.

In the context of the deep restructuring of the global industrial chain and the concurrent pursuit of green and sustainable development, enterprises need to secure long-term, reliable supply chain competitiveness. The burgeoning wave of digitalization is simultaneously reshaping industry landscapes. Based on a sample of the Chinese manufacturing sector, this study explores how supply chain digital transformation enhances commercial credit financing performance by improving corporate adjustment capability. The research finds that supply chain digital transformation strengthens a firm’s commercial credit financing capacity through a dual-core mediating mechanism of corporate adjustment capability: (1) enhancing the adjustment capability of operational management, which mitigates the negative impact of cost stickiness on financing; (2) enhancing the adjustment capability of organizational management, which amplifies the positive effect of organizational resilience on financing. The study further reveals key moderating effects: (1) External Governance: Strong ESG performance strengthens the financing effect of digitalization by building reputational capital. High industry competition strengthens the financing effect by prompting firms to optimize operational efficiency. (2) Internal Endowments: Environmental risk aversion stemming from a firm’s polluting nature significantly weakens the credit supply effect of digitalization. The market-oriented foundation underpinning private ownership effectively activates the credit supply effect of digitalization. This study constructs an integrated pathway model of “Digital Transformation–Corporate Adjustment Capability–Supply Chain Credit Access.” It provides a research perspective for understanding how digitalization reshapes the logic of supply chain finance and offers empirical evidence for pathways empowering enterprises through digital transformation. Full article

(This article belongs to the Topic Sustainable and Green Finance)

21 pages, 1185 KB  

Open AccessArticle

How Green Finance Reform Narrows the Urban-Rural Income Gap: Evidence from China

by Huiji Wang

Sustainability 2025, 17(18), 8344; https://doi.org/10.3390/su17188344 - 17 Sep 2025

Cited by 4 | Viewed by 2366

Abstract

Addressing the persistent urban-rural income gap is critical for sustainable and inclusive development. Leveraging panel data from 286 Chinese prefecture-level cities (2005–2022) and a multi-period difference-in-differences design, this study evaluates the impact of China’s Green Finance Reform and Innovation Pilot Zones (GFRIPZ) policy. [...] Read more.

Addressing the persistent urban-rural income gap is critical for sustainable and inclusive development. Leveraging panel data from 286 Chinese prefecture-level cities (2005–2022) and a multi-period difference-in-differences design, this study evaluates the impact of China’s Green Finance Reform and Innovation Pilot Zones (GFRIPZ) policy. First, the GFRIPZ policy significantly narrows the urban-rural income gap, with results robust to a range of sensitivity tests. Second, this convergence is driven by curbing conventional transport-infrastructure expansion and enhancing tertiary-sector employment, thereby improving labor quality. Third, policy effectiveness varies geographically and administratively, with the strongest impacts in central and western regions and non-provincial capitals. Fourth, negative spatial spillovers arise as pilot zones draw resources from neighboring non-pilot areas. These findings highlight the transformative potential of targeted green finance reforms for inclusive structural transformation in emerging economies. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

23 pages, 687 KB  

Open AccessArticle

How Does Green Financial Reform Impact Carbon Emission Reduction and Pollutant Mitigation in Chinese Manufacturing Enterprises?

by Bingnan Guo, Baoliang Zhan and Mengyu Wang

Sustainability 2025, 17(17), 7709; https://doi.org/10.3390/su17177709 - 27 Aug 2025

Cited by 5 | Viewed by 1577

Abstract

Manufacturing enterprises, as significant contributors to high carbon emissions, play a crucial role in effectively reducing carbon emission intensity, which is essential for China to successfully achieve its “dual carbon” goals. This study examines the period from 2010 to 2022, focusing on manufacturing [...] Read more.

Manufacturing enterprises, as significant contributors to high carbon emissions, play a crucial role in effectively reducing carbon emission intensity, which is essential for China to successfully achieve its “dual carbon” goals. This study examines the period from 2010 to 2022, focusing on manufacturing enterprises listed on the Shanghai and Shenzhen A-shares to investigate the effects of green financial reform on carbon and pollutant emissions. Our findings reveal that the results from the parallel trend test and the regression analysis of the Difference-in-Differences (DID) model indicate that the implementation of green financial reform has a negative impact on the carbon and pollutant emissions of manufacturing enterprises, which is supported by a series of robustness tests. Heterogeneity analysis shows that the emission reduction effect of green financial reform on pollutants is significant only in manufacturing enterprises with low industry competitiveness, while the inhibitory effect on carbon emissions is significant only in those with high industry competitiveness. Furthermore, the emission reduction effects are significant in highly polluting industries, non-state-owned enterprises, and small-scale firms. Green technological innovation and financing constraints serve as the channels connecting green financial reform with emission reduction and carbon mitigation. The tax burden negatively moderates this process, while environmental, social, and governance (ESG) performance positively moderates it. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

19 pages, 303 KB  

Open AccessArticle

Can Green Funds Improve Corporate Carbon Performance? Firm-Level Evidence from China

by Pengcheng Wang and Shanyue Jin

Sustainability 2025, 17(12), 5409; https://doi.org/10.3390/su17125409 - 11 Jun 2025

Cited by 3 | Viewed by 2523

Abstract

Intensifying challenges posed by global warming have elevated the urgency of improving corporate carbon performance and curbing carbon emissions. Green financial instruments serve a vital function in advancing corporate transitions toward environmentally responsible and low-carbon operational models. This research explores the influence of [...] Read more.

Intensifying challenges posed by global warming have elevated the urgency of improving corporate carbon performance and curbing carbon emissions. Green financial instruments serve a vital function in advancing corporate transitions toward environmentally responsible and low-carbon operational models. This research explores the influence of green funds on carbon performance at the firm level, aiming to clarify the micro-level mechanisms through which green financial instruments promote low-carbon development. The study utilizes data from Chinese listed companies spanning 2012 to 2021 and employs a TWFE regression model to empirically assess the effects. The findings indicate that green funds contribute to improved carbon performance. Furthermore, this effect is positively moderated by executive green awareness and financial background, indicating that managerial cognition and experience play a vital role in amplifying the benefits of green finance. Notably, green funds exert a stronger positive effect in highly polluting industries, suggesting that green financial resources should be directed not only to low-emission sectors but also to high-emission ones to improve their carbon efficiency. These findings extend existing literature by offering firm-level evidence on the effectiveness of green financial instruments and underscore the importance of targeted policy support to encourage green upgrading across all industry types. Full article

(This article belongs to the Topic Sustainable and Green Finance)

28 pages, 440 KB  

Open AccessArticle

Impact of Sustainable Finance on Business Financial Performance: Insight from London Stock Exchange Firms

by Hani A. Omran Elarabi and Wagdi Khalifa

Sustainability 2025, 17(11), 4898; https://doi.org/10.3390/su17114898 - 27 May 2025

Cited by 5 | Viewed by 9659

Abstract

The United Kingdom has enacted rules to support green investment, enhancing the financial sustainability of enterprises adopting sustainable practices. These enactments offer financial incentives to enterprises that invest in sustainable initiatives. Companies that do not adopt sustainable practices face increasing operating expenses, a [...] Read more.

The United Kingdom has enacted rules to support green investment, enhancing the financial sustainability of enterprises adopting sustainable practices. These enactments offer financial incentives to enterprises that invest in sustainable initiatives. Companies that do not adopt sustainable practices face increasing operating expenses, a declining market share, and diminished investor trust. This study leveraged the stakeholder theory to examine the impact of sustainable finance on business financial performance. The study focused on 143 non-financial companies listed on the London Stock Exchange, using 17 years of data between 2008 and 2024 obtained from Thomson Reuters Eikon DataStream. The data were analyzed using the two-step Generalized Method of Estimation (GMM) due to endogeneity identified in the data. The study discovered that green financing initiatives, policies for emission reduction, and sustainable product initiatives had a positive and significant impact on business financial performance. The study also revealed that environmental investment initiatives negatively and significantly impacted business financial performance. Investing in green finance and sustainable products enhances financial performance by fostering investor trust and bolstering corporate reputation, fortifying firms. Adhering to international sustainability standards promotes long-term value creation and market alignment. To mitigate financial strain, environmental investments necessitate stringent cost management. An equitable strategy ensures that, by mitigating risks, sustainability measures enhance profitability. By meticulously integrating these projects, companies can achieve environmental and financial benefits while sustaining a competitive advantage in a rapidly evolving corporate landscape. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

35 pages, 3634 KB  

Open AccessArticle

Ripple Effect or Spatial Interaction? A Spatial Analysis of Green Finance and Carbon Emissions in the Yellow River Basin

by Jiayu Ru, Lu Gan and Gulinaer Yusufu

Sustainability 2025, 17(10), 4713; https://doi.org/10.3390/su17104713 - 20 May 2025

Cited by 3 | Viewed by 1538

Abstract

Grounded in the theory of new economic geography, this research develops a comprehensive theoretical framework to examine the spatial interaction mechanisms between the Green Finance Index and carbon emissions. Employing a range of econometric techniques—including three-dimensional kernel density estimation, spatial quantile regression, bivariate [...] Read more.

Grounded in the theory of new economic geography, this research develops a comprehensive theoretical framework to examine the spatial interaction mechanisms between the Green Finance Index and carbon emissions. Employing a range of econometric techniques—including three-dimensional kernel density estimation, spatial quantile regression, bivariate spatial autocorrelation analysis, and the spatial linkage equation model—the dynamic evolution, spatial pattern shifts, and mutual influences of green finance and carbon emissions in the middle and lower reaches of the Yellow River from 2003 to 2022 are systematically assessed. The findings indicate that (1) both carbon emissions and the Green Finance Index have experienced a trajectory of continuous growth, phased decline, and structural optimization, accompanied by a gradual shift in the regional center of gravity from coastal economic zones towards resource-intensive and traditional industry-concentrated areas; (2) significant spatial clustering is evident for both green finance and carbon emissions, demonstrating a strong spatial correlation and regional synergy effects; (3) a persistent negative spatial correlation exists between green finance and carbon emissions; and (4) green finance exerts a stable negative spatial spillover effect on carbon emissions, suggesting that the influence of green finance extends beyond localities to adjacent regions through spatial externalities, manifesting pronounced spatial transmission and linkage characteristics. By unveiling the bidirectional spatial association between green finance and carbon emissions, this study highlights the pivotal role of green finance in driving regional low-carbon transitions. The results provide theoretical insights for optimizing green finance policies within the Yellow River Basin and offer valuable international references for similar regional low-carbon development initiatives. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

30 pages, 1617 KB  

Open AccessArticle

Does Green Finance Facilitate the Upgrading of Green Export Quality? Evidence from China’s Green Loan Interest Subsidies Policy

by Jinming Shi, Jia Li, Shuai Jiang, Yingqian Liu and Xiaoyu Yin

Sustainability 2025, 17(10), 4375; https://doi.org/10.3390/su17104375 - 12 May 2025

Cited by 4 | Viewed by 3022

Abstract

In the global pursuit of sustainable development and climate change mitigation, reconciling export growth with environmental protection has emerged as a universal challenge. As the world’s largest developing economy, China has traditionally relied on a resource-intensive development model to fuel rapid foreign trade [...] Read more.

In the global pursuit of sustainable development and climate change mitigation, reconciling export growth with environmental protection has emerged as a universal challenge. As the world’s largest developing economy, China has traditionally relied on a resource-intensive development model to fuel rapid foreign trade growth. However, this extensive growth pattern has not only led to environmental pollution domestically but has also encountered hurdles from international green trade barriers. Finance, as a key driver of stable economic growth, plays a pivotal role in achieving high-quality trade development. Against this backdrop, the Chinese government has introduced the green credit interest subsidies policy. This policy aims to coordinate government financial resources and guide capital toward green production, alleviating financing constraints and fostering the upgrading of export product quality. Utilizing data from the World Bank, China Customs statistics, and provincial panels from 2011 to 2020, this study employs a multi-period difference-in-differences (DID) model to examine the causal impact of the green credit subsidies policy on efforts to upgrade the export quality of green products across China’s regions. The benchmark regression results indicate that the green credit interest subsidies policy has significantly improved the export quality of green products across China’s manufacturing industries. Heterogeneity analysis shows that this policy has had a more pronounced positive impact on green product quality in industries with quality-based competition strategies, in regions with well-coordinated local finance and financial policies, as well as in countries that have concluded environmental clauses with China. Mechanism analysis reveals that, on the export side, the policy enhances green product quality by easing financing constraints, increasing green credit, boosting productivity, and upgrading industrial structures. On the import side, the policy promotes green product quality by expanding the scale, variety, and quality of green intermediate goods. This research offers valuable insights for developing countries aiming to establish export-oriented green transformation and upgrading strategies. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Figure 1

29 pages, 316 KB  

Open AccessArticle

Macro Stewardship: A Transformative Approach in Sustainable Finance for Achieving Sustainability

by Diana George, Ian Christie and Walter Wehrmeyer

Sustainability 2025, 17(8), 3287; https://doi.org/10.3390/su17083287 - 8 Apr 2025

Cited by 3 | Viewed by 3389

Abstract

This conceptual paper introduces Macro Stewardship (Ma-S) as a transformative approach in sustainable finance to challenge financial market failures that contribute to systemic collective action issues such as climate change, biodiversity loss, and inequality. It argues that traditional Environmental, Social, and Governance (ESG) [...] Read more.

This conceptual paper introduces Macro Stewardship (Ma-S) as a transformative approach in sustainable finance to challenge financial market failures that contribute to systemic collective action issues such as climate change, biodiversity loss, and inequality. It argues that traditional Environmental, Social, and Governance (ESG) strategies focus on individual corporate actions and often fail to drive systemic change. Ma-S, on the other hand, leverages the power of financial institutions to engage governments, policymakers, and stakeholders in addressing market failures tied to sustainability. Unlike Micro Stewardship (Mi-S) or ESG approach, which centers on corporate-level engagement, Ma-S promotes collaborative interventions to align the interests of businesses, governments, and society. This approach aims to influence regulatory changes, shape public policy, and support the United Nations Sustainable Development Goals (SDGs). The paper is guided by the research question: How can Macro Stewardship by financial institutions serve as a transformative approach in sustainable finance to achieve systemic change? It proposes a definition for Ma-S, outlines its practical applications, identifies implementation challenges, and presents a research agenda to evaluate its effectiveness and impact. In doing so, the paper lays a foundation for future empirical studies and calls for a shift in how financial systems contribute to global sustainability. Full article

(This article belongs to the Topic Sustainable and Green Finance)

►▼ Show Figures

Graphical abstract

Show export options expand_more Show export options expand_less

Select all

Export citation of selected articles as:

Plain Text BibTeX BibTeX (without abstracts) Endnote Endnote (without abstracts) Tab-delimited RIS

 

Error

Oops... you haven't selected anything for export.

Ok

clear

Displaying articles 1-23