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Green finance research around the world: a review of literature

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  • Ozili, Peterson Kitakogelu

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.

Suggested Citation

  • Ozili, Peterson Kitakogelu, 2022. "Green finance research around the world: a review of literature," MPRA Paper 114899, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:114899
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    File URL: https://mpra.ub.uni-muenchen.de/114899/1/MPRA_paper_114899.pdf
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    References listed on IDEAS

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    1. Romain Berrou & Nicola Ciampoli & Vladimiro Marini, 2019. "Defining Green Finance: Existing Standards and Main Challenges," Palgrave Studies in Impact Finance, in: Marco Migliorelli & Philippe Dessertine (ed.), The Rise of Green Finance in Europe, chapter 0, pages 31-51, Palgrave Macmillan.
    2. Noam Bergman, 2018. "Impacts of the Fossil Fuel Divestment Movement: Effects on Finance, Policy and Public Discourse," Sustainability, MDPI, vol. 10(7), pages 1-18, July.
    3. Dikau, Simon & Volz, Ulrich, 2021. "Central bank mandates, sustainability objectives and the promotion of green finance," Ecological Economics, Elsevier, vol. 184(C).
    4. Chang, Youngho, 2019. "Green Finance in Singapore: Barriers and Solutions," ADBI Working Papers 915, Asian Development Bank Institute.
    5. Kathrin Berensmann & Nannette Lindenberg, 2019. "Green Finance: Across the Universe," World Scientific Book Chapters, in: Sabri Boubaker & Duc Khuong Nguyen (ed.), Corporate Social Responsibility, Ethics and Sustainable Prosperity, chapter 11, pages 305-332, World Scientific Publishing Co. Pte. Ltd..
    6. Berensmann, Kathrin & Lindenberg, Nannette, 2016. "Green finance: actors, challenges and policy recommendations," Briefing Papers 23/2016, German Institute of Development and Sustainability (IDOS).
    7. Radoslav S. Dimitrov, 2016. "The Paris Agreement on Climate Change: Behind Closed Doors," Global Environmental Politics, MIT Press, vol. 16(3), pages 1-11, August.
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    Citations

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    Cited by:

    1. Dr. Amolo Elvis Juma Amolo, PhD, 2024. "Green Financing for Sustainable Development in Infrastructure Projects in Kenya," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 11(8), pages 420-426, August.
    2. Changfei Nie & Yujie Yao & Yuan Feng, 2024. "The impact of green finance on economic growth: Evidence from the green finance reform and innovation pilot zone," American Journal of Economics and Sociology, Wiley Blackwell, vol. 83(4), pages 709-736, September.
    3. Maria V. Sigova & Igor K. Klyuchnikov & Oleg I. Klyuchnikov, 2024. "Sustainability and Security of Green Finance from the Multi-agent Games Perspective," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 78-95, February.
    4. Md. Emran Hossain & Ehsan Ullah & Mohd Ziaur Rehman & Mohammad Haseeb & Miguel Angel Esquivias, 2024. "Going Sustainable or Going Extinct: The Consequences of Clean Technologies, Green Finance, and Natural Resources on the Environment," Sustainability, MDPI, vol. 16(14), pages 1-18, July.
    5. Jing, Ruifeng & Liu, Ruizhi, 2024. "The impact of green finance on persistence of green innovation at firm-level: A moderating perspective based on environmental regulation intensity," Finance Research Letters, Elsevier, vol. 62(PB).
    6. Tang, Xiaobo & Yao, Xingyuan & Dai, Ruyi & Wang, Qian, 2024. "Does green matter for crowdfunding? International evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 92(C).
    7. Le Tran Ha Trang & Nguyen Thi Dieu Chi & Cao Thi Y Nhi & Dang Thi Thuy Hong, 2024. "Impact of green finance and environmental tax on sustainable development: Evidence from Vietnam," Environmental & Socio-economic Studies, Sciendo, vol. 12(3), pages 1-10.
    8. Ma, Hongmei, 2024. "Role of green innovation and green finance on green recovery: Analysis of natural resources rents," Resources Policy, Elsevier, vol. 89(C).
    9. Mertzanis, Charilaos, 2023. "FinTech finance and social-environmental performance around the world," Finance Research Letters, Elsevier, vol. 56(C).
    10. Naima Lassoued & Imen Khanchel & Cyrine Khiari, 2024. "Pollution control bonds and overinvestment in utility companies: Does ownership matter?," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 51(2), pages 517-539, June.
    11. Helmi, Mohamad Husam & Elsayed, Ahmed H. & Khalfaoui, Rabeh, 2024. "The impact of geopolitical risk on sustainable markets: A quantile-time-frequency analysis," Finance Research Letters, Elsevier, vol. 64(C).
    12. Lu, Xunfa & Huang, Nan & Mo, Jianlei & Ye, Zhitao, 2023. "Dynamics of the return and volatility connectedness among green finance markets during the COVID-19 pandemic," Energy Economics, Elsevier, vol. 125(C).
    13. Xuelian Li & Tinghui Lu & Jyh-Horng Lin, 2022. "Bank Interest Margin and Green Lending Policy under Sunflower Management," Sustainability, MDPI, vol. 14(14), pages 1-15, July.
    14. Zhang, HongWei & Xie, Yuan, 2024. "Assessing natural resources, rebounding trends, digital economic structure and green recovery dynamics in China," Resources Policy, Elsevier, vol. 88(C).
    15. Carbune Daniela Iulia Maria, 2024. "Romanian Banking System - Steps To A Sustainable Future," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 206-214, June.
    16. Clara Paola Camargo-Díaz & Edwin Paipa-Sanabria & Julian Andres Zapata-Cortes & Yamileth Aguirre-Restrepo & Edgar Eduardo Quiñones-Bolaños, 2022. "A Review of Economic Incentives to Promote Decarbonization Alternatives in Maritime and Inland Waterway Transport Modes," Sustainability, MDPI, vol. 14(21), pages 1-20, November.
    17. Mihaela Simionescu & Beáta Gavurová, 2023. "Pollution, income inequality and green finance in the new EU member states," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-11, December.
    18. Chekani Nkwaira & Huibrecht Margaretha Van der Poll, 2024. "An Exposition of the Gap between Public Sector and Private Sector Participation in Green Finance," Risks, MDPI, vol. 12(7), pages 1-13, June.
    19. Ma, Dan & Zhu, Yanjin & Yang, Yuhan, 2024. "How Green finance affects export production quality: Fresh evidence from China," Energy Economics, Elsevier, vol. 131(C).

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    More about this item

    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.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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