Green finance research around the world: a review of literature

Ozili, Peterson Kitakogelu (2022): Green finance research around the world: a review of literature.

Abstract

This paper reviews the existing research on green finance. It identifies the important themes in the green finance literature, particularly, the strategies to increase green financing; efforts to make green investment profitable; promoting green financing using technology and policy, the role of regulators and financial institutions in the green finance agenda, and the challenges of green financing. Several cross-country observations about the challenges of green finance and solutions to green finance issues are documented. The findings show that green finance has the potential to make a significant difference in the environment, society and for climate change mitigation, but many challenges abound such as the lack of awareness about green finance, inconsistent definitions of green finance, lack of policy coordination for green financing, inconsistent policies, and lack of profitable incentives to investors and financial institutions who are willing to invest in climate change mitigation.

• Item Type: MPRA Paper
• Language: English
• Keywords: literature review, green finance, green investment, climate change, sustainable finance, green bonds, green banks, sustainable development goals, climate finance, environment, green loan, climate change mitigation. Paris Agreement, COP26.
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G23 - Non-bank Financial Institutions ; Financial Instruments ; Institutional Investors; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Adoption and Costs ; Distributional Effects ; Employment Effects; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

References

Bahl, S. (2012). Green banking-The new strategic imperative. Asian Journal of Research in Business Economics and Management, 2(2), 176-185.

Barber, B. M., Morse, A., & Yasuda, A. (2021). Impact investing. Journal of Financial Economics, 139(1), 162-185.

Bebbington, J., & Unerman, J. (2018). Achieving the United Nations sustainable development goals. Accounting, Auditing & Accountability Journal. 31(1), 2-24.

Bernstein, S. (2017). The United Nations and the governance of sustainable development goals. In Governing through goals: Sustainable Development Goals as governance innovation, 213-239. Cambridge, Massachusetts.

Berensmann, K., & Lindenberg, N. (2016). Green finance: actors, challenges and policy recommendations. German Development Institute, Briefing Paper, 23. Bonn.

Berensmann, K., & Lindenberg, N. (2019). Green Finance: Across the Universe. In Corporate Social Responsibility, Ethics and Sustainable Prosperity (pp. 305-332). Beijing.

Bergman, N. (2018). Impacts of the fossil fuel divestment movement: Effects on finance, policy and public discourse. Sustainability, 10(7), 25-29.

Berrou, R., Ciampoli, N., & Marini, V. (2019). Defining green finance: Existing standards and main challenges. In The Rise of Green Finance in Europe (pp. 31-51). Palgrave Macmillan, Cham.

Blau, J. (2017). The Paris Agreement: climate change, solidarity, and human rights. Springer. Cham.

Breitenfellner, A., Hasenhüttl, S., Lehmann, G., And Tschulik, A. (2020). Green Finance – Opportunities for the Austrian Financial Sector. Financial Stability Report 40.

CBI (2017). The Role of Exchanges in Accelerating the Growth of the Green Bond Market, May 2017. Available online: https://www.climatebonds.net/files/files/RoleStock%20Exchanges.pdf (accessed on 28 July 2020)

CBI (2019) Green Finance Position Paper. Infrastructure and Energy and Financial Services. Conferedration of British Industries. United Kingdom.

Chang, Y. (2019). Green finance in Singapore: barriers and solutions. ADBI Working Paper 915 (2019), Available at SSRN: https://ssrn.com/abstract=3326287.

Chuah, J. (2020). Legal Aspects of Green Shipping Finance: Insights from the European Investment Bank’s Schemes. In Maritime Law in Motion (pp. 131-152). Springer, Cham.

Cleveland, C. J., & Reibstein, R. (2015). The path to fossil fuel divestment for universities: climate responsible investment. Available at SSRN 2565941.

Damianova, A., Guttierez, E., Levitainskaya, K., Minasyan, G., Nemova, V. (2018). Russia Green Finance: Unlocking Opportunities for Green Investments. A policy Note. World Bank Group. Washington D.C.

Dia, A. M. (2019). How Africa can improve mobilization of climate finance for sustainable development? UNDP Blog Post. New York City.

Dikau, S., & Volz, U. (2021). Central bank mandates, sustainability objectives and the promotion of green finance. Ecological Economics, 184, 107022.

Dimitrov, R. S. (2016). The Paris agreement on climate change: Behind closed doors. Global Environmental Politics, 16(3), 1-11.

Dörry, S., & Schulz, C. (2018). Green financing, interrupted. Potential directions for sustainable finance in Luxembourg. Local Environment, 23(7), 717-733.