Based on the "Internet + Government Services" pilot as a quasi-natural experiment, this paper examined the impact of digital government construction on corporate ESG performance. The study found that digital government construction contributes to the improvement of corporate ESG outcomes. Mechanism analyses suggest that digital government enhances corporate ESG performance primarily through four channels: promoting green technological innovation, upgrading human capital structures, reducing information asymmetry, and lowering agency costs. Further heterogeneity analyses reveal that the positive effect of digital government on corporate ESG performance is more pronounced among state-owned enterprises, firms with lower financing constraints, large-scale enterprises, and firms located in regions with higher levels of governmental environmental attention. The findings provide important implications for understanding how improvements in governmental digital governance capacity can foster corporate ESG practices in the digital era.
This study investigated how the Inflation Reduction Act (IRA), a landmark U.S. policy promoting clean energy and decarbonization, has restructured commodity market interdependencies across agriculture, industrial metals, and traditional energy sectors. Using a time-varying parameter vector autoregression (TVP-VAR)-based decomposed and partial connectedness framework, the analysis distinguishes between internal (within-group) and external (between-group) spillovers, as well as inclusive and exclusive transmission channels across commodity groups. The findings demonstrate a shift toward sector-driven dynamics: industrial metals exhibit strengthened internal cohesion, while cross-sector spillovers significantly weaken. Copper emerges as the dominant net transmitter before and after the IRA, reinforcing its critical role in electrification and clean energy infrastructure. In contrast, crude oil and natural gas remain persistent net receivers, indicating the diminishing systemic influence of fossil fuels. The total connectedness index also declines post-IRA, indicating lower overall market contagion. These results emphasize that the IRA has accelerated a structural realignment in commodity markets, positioning industrial metals at the core of the energy transition. As renewable energy adoption advances, strategic investment and risk management strategies must increasingly account for the rising centrality of critical minerals and the fading dominance of traditional energy commodities.
The aim of this study was to identify the systemic connectedness between ESG-based sustainability uncertainty (ESGUI) and stock markets and to reveal how these relationships changed under different volatility regimes and time horizons for the period 2002-2024. The analysis process integrated the time domain connectedness index of Diebold and Y & imath;lmaz (2012), the frequency-domain connectedness method of Barun & iacute;k and K & rcaron;ehl & iacute;k (2018), the quantile-based connectedness analysis of et al. (2022). The findings were evaluated separately for the entire period and for the subperiods of the crisis (2021-2022), EU Green Deal (2019-2020), and carbon pricing process (2021-2023).
This study analyzed tail-dependent lead-lag linkages between fossil and sustainable assets using daily WTI crude oil futures, clean-energy equities, and the S&P Green Bond Index from August 3, 2015, to August 7, 2025. Unlike existing literature that typically studies oil-clean energy or green bond-equities in isolation, we embedded fossil fuel prices, clean-energy equities, and green bonds in a single tail-state lead-lag system and documented how transmission patterns reconfigure across downside and upside regimes. To condition the analysis on common uncertainty proxies, returns were regressed on the CBOE VIX and the (log) U.S. Economic Policy Uncertainty index, and the resulting residual-based series were examined with the cross-quantilogram (CQ) across target quantiles tau 1 is an element of {0.10, 0.50, 0.90}, conditional on source states tau(2) is an element of {0.10, 0.90}, with similar to 95% confidence bands. Heatmaps summarize average CQ signs (co-movement vs. stabilization) and the breadth of significance across lags. Two regularities emerged. First, dependence is state-and tail-contingent. In downside states (tau(2) = 0.10), patterns of strong downside co-movement and rally suppression are evident, particularly between oil and renewables, with modest but persistent linkages to green bonds. Second, in upside states (tau 2 = 0.90), the dominant pattern shifts toward stabilization and selective upside clustering, most visible within the "green block" and through lagged upside predictability from green bonds toward oil. Overall, conditional on controls for VIX and EPU, fossil and sustainable assets exhibit asymmetric, tail-driven interdependence: diversification weakens during distress, while stabilization and selective upside synchronization dominate in buoyant markets. These findings provide valuable insights for tail-aware portfolio design and state-contingent risk management.
Local governments play an important role in promoting firms' green transformation through policy guidance, financial support, regulatory measures, and resource allocation. In this study, we used A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2010 to 2023 as research samples and explored the relationship and underlying mechanisms between local governments' green attention (GGA) and firm green transformation (FGT) using textual analysis techniques. The empirical results showed that higher GGA significantly promotes FGT. Mechanism analysis indicates that GGA enhances FGT by strengthening firms' green innovation capacity and improving environmental information disclosure. In addition, firms' greenwashing prevention measures further strengthen the positive effect of GGA on FGT. The relationship between GGA and FGT varies across ownership types, pollution intensity, and levels of GGA. This study enriches the theoretical and practical understanding of government attention in promoting firm green transformation and provides insights for guiding local government behavior and improving corporate green governance.
In this study, we investigated the role of international financial assistance in promoting clean energy development and environmental sustainability across 89 developing countries from 2000 to 2021. Using a Panel ARDL model with the Pooled Mean Group (PMG) estimator, assesses assessed the short-and long-run effects of global financial flows directed toward clean energy research, development, and production (RD&P). The findings revealed that while international financial assistance contributes to reductions in CO2 emissions in the long run, its influence on the renewable energy share in total energy supply remains weak and statistically insignificant. This outcome reflects the structural challenges facing developing economies, particularly rapid energy demand growth driven by industrialization and limited absorptive capacity for green technologies. The results further highlight the critical role of governance quality in shaping the effectiveness of external finance: Stronger governance systematically amplifies environmental returns in upper-income economies while influencing the relationship differently in lower-income settings. Policy implications suggest that international support should not only increase in scale but also be better targeted and better governed, emphasizing system-enabling investments, institutional strengthening, and long-term policy alignment to ensure a sustained and inclusive clean-energy transition.
This study identifies the dynamics of sentiment contagion between individual and institutional investors in the context of green bond markets across China, Japan, the United States, and the European Union (EU), covering the period from 3 January 2022 to 31 December 2024. Applying a time-varying parameter vector autoregression model, we construct sentiment contagion indicators to capture the evolving interdependencies in the sentiment of the two investor groups. Subsequently, we investigate the impact of these contagion effects on the performance of domestic and cross-border green bond markets by applying exponential general autoregressive conditional heteroscedasticity and quantile-on-quantile regression techniques. Our empirical results reveal consistently high levels of sentiment contagion, with particularly pronounced effects observed in Japan and the EU. The findings underscore the crucial role of sentiment spillovers in shaping green bond markets' performance, although the magnitude and direction of these effects vary across countries and quantiles. Our research findings contribute to the growing literature on sustainable and behavioral finance. It also offers valuable policy implications and investment strategies to green bond regulators and investors across countries.
Achieving carbon neutrality targets through environmentally friendly initiatives and green financing has become a global focus. This study examined the impact of economic growth, green finance, geopolitical risk, green production practices, and urbanization on carbon emissions in the context of G7 economies for the time period of 1994-2020. Using a panel quantile regression method, the study captured heterogeneous environmental impacts of explanatory factors. Findings reveal that economic growth has a positive impact on carbon emissions. However, this impact is low in upper quantiles. Green finance has a negative relationship with carbon emissions, depicting the supportive role of green financing to achieve environmental sustainability. Geopolitical risk shows adverse environmental outcomes, which calls for geopolitical stability to avoid disruptions in implementing green initiatives. Results show a negative link between green production practices and carbon emissions, validating the pivotal contribution of ecologically sustainable manufacturing activities to enhance environmental quality in G7 nations. Conversely, urbanization has a positive impact on carbon emissions, emphasizing the need for greener urban planning strategies. In light of these empirical outcomes, we recommend fostering green finance (SDG-12), implementing green production practices (SDG-9), curbing geopolitical risks (SDG-16), enhancing environmentally sustainable economic growth (SDG-8), and improving green urban planning strategies (SDG-11) for advancing carbon neutrality (SDG-13) in G7 economies.
This study investigated the correlation between the development of Islamic banking and environmental sustainability [through carbon dioxide (CO2) emissions] in regard to the QISMUT countries (Qatar, Indonesia, Saudi Arabia, Malaysia, the United Arab Emirates, and Turkey), over the 2015-2023 period. Despite the theoretical alignment between Shariah-based finance principles- which emphasize harm prevention (darar), public interest (maslahah), and environmental stewardship-and sustainability objectives, empirical evidence on whether Islamic finance translates its ethical framework into tangible environmental benefits remains limited and inconclusive. To our knowledge, this study provides the first comprehensive econometric assessment of the Islamic finance-carbon emissions relationship within the QISMUT country grouping. The study employed a unique combination of three Islamic finance development proxies (total assets, Shari'ah-compliant financing, and financing-to-GDP ratio) and panel-corrected standard errors (PCSE) as the primary estimation method, with feasible generalized least squares (FGLS) used as a robustness test to address cross-sectional dependence and economic heterogeneity. The findings indicate that there is a strong negative correlation between the development of Islamic banking and CO2 emissions under both PCSE and FGLS specifications. This supports the view that the ethical foundation of Islamic banking, when properly incorporated into lending and investment choices, can lead to the emergence of environmental advantages. The comparatively brief panel (2015-2023), the use of aggregate variables at the national level, and the lack of direct measures of transmission channels will demand future research to rely on longer time series, sector-level or project-level data, and more sophisticated identification strategies like instrumental variable methods to reinforce causal claims and explain other mechanisms through which Islamic banking influences environmental outcomes. On the whole, the research has significant implications for policymakers hoping to utilize Islamic finance to promote sustainable development goals, for Islamic financial institutions focusing on the inclusion of clear environmental standards in their financing activities, and for regulators and development partners wishing to use Islamic banking as a significant tool in the global shift to a low-carbon economy.
This study investigates whether top executive traits shape the appeal of environmentally oriented firms to institutional investors committed to the Principles for Responsible Investment (PRI). Using firms quoted on the Spanish Stock Exchange over the period 2018-2022, we analyzed how managerial narcissism and decision-making authority affect capital allocation toward green assets. The analysis further incorporated governance and demographic contingencies, including executive age and the existence of a dedicated CSR committee, as well as heterogeneity across investor locations and investment horizons. The empirical evidence indicated that elevated levels of CEO narcissism and power are associated with a lower propensity of responsible investors to hold green assets. This adverse relationship is particularly pronounced when corporate leadership is older, consistent with perceptions of weaker strategic alignment with sustainability-oriented innovation. By contrast, the presence of a CSR committee functions as a credibility-enhancing mechanism that offsets, and in some cases neutralizes, the detrimental influence of CEO traits on sustainable investment decisions. We found no systematic variation in these relationships across countries or between short-and long-term-oriented PRI investors. Overall, the findings advance the corporate governance and sustainable finance literature by highlighting how executive psychology and internal monitoring structures jointly condition investor responses to firms' environmental strategies.
Developing countries can combat energy poverty by enhancing renewable energy and economic growth with minimal adverse environmental effects. In this paper, we present a comprehensive analysis of energy poverty, renewable energy, economic growth, carbon dioxide emissions, and urbanization (URB) in South Asian countries from 1990 to 2021, focusing on Pakistan, India, Bangladesh, and Sri Lanka. We employed econometric analysis techniques like Panel Pooled Mean Group (PMG)-Autoregressive Distributed Lag (ARDL), Fully Modified Ordinary Least Squares (FMOLS), and Dynamic Ordinary Least Squares (DOLS) to provide empirical results, as they enable panel data and control for endogeneity. The findings suggested that the fight against energy poverty and the progress of economic growth need not be detrimental to the environment. Our results indicated that authorities can bring about positive change by promoting green sanitation, which involves using renewable energy sources in sanitation systems and combating energy poverty with renewable energy. These findings are significant in understanding the complex interplay between energy poverty, economic growth, and environmental deterioration, and they provide a hopeful basis for developing effective policies to address energy poverty, economic growth, and environmental degradation.
To overcome the limitations of one-dimensional rankings and subjective expert-based evaluations, we introduced an objective multi-criteria framework for assessing corporate performance in the global automotive sector. The approach integrated financial indicators with Environmental, Social, and Governance (ESG) scores for a dataset of 430 manufacturers. Performance ranking was conducted using Extended Goal Programming (EGP), while Rough Set Theory (RST) was employed for group classification. The results indicated that the EGP model effectively identifies top-performing firms demonstrating balanced excellence across financial profitability and sustainability dimensions. Sensitivity analysis further revealed that ESG performance serves as the key differentiator under varying stakeholder priorities. Moreover, the RST classification framework substantially outperforms conventional Support Vector Machine (SVM) models, achieving accuracy levels around 90% compared to 80.95% obtained in the SVM model. This indicated that rough set model robustly addresses uncertainty and indiscernibility of data within industry-specific financial variables. The application of these methodologies provides investors and managers with a rigorous, data-driven tool for strategic benchmarking and sustainability-oriented decision-making.
The widening global deficit in sustainable urban infrastructure financing highlights the limitations of conventional financial models. Although green finance instruments and digital financial technologies have expanded rapidly, their roles within financing structures for sustainable urban development remain fragmented and insufficiently synthesized. This study systematically identifies key green finance structures and digital technologies that enhance their operation in facilitating sustainable urban development. The study adopts a mixed-method systematic review conducted in two phases. A total of 113 articles were drawn from the literature for bibliometric analysis, and 33 articles were selected for further systematic analysis. The results of the bibliometric analysis indicate that sustainable urban transitions are propelled by synergistic relationships among governmental policies, green finance structures, and digital technologies. Three dominant themes-organized around government-led initiatives for urban sustainability, financing structures for low-carbon cities, and digital innovations for green finance-were identified. The results from the systematic analysis identified revolving funds and green public-private partnerships as key financing structures. Also, integration of blockchain and tokenization, artificial intelligence and big data analytics, and digital finance platforms into the financing structures are the most viable means of facilitating and expanding green finance for sustainable urban development. The findings of the study provide policymakers and stakeholders with a comprehensive understanding of the complexities of integrating digital innovations into a green financing structure. Furthermore, the study provides a pragmatic foundation for structuring policy and corporate strategies that integrate digital innovation into green finance structures.
In this study, we empirically investigated the dual impact of green bond issuances on greenhouse gas (GHG) emissions and sovereign Environmental, Social, and Governance (ESG) scores. Using a fixed-effects panel regression model for a global sample of countries from 2000 till 2022, we found that green bond issuance is correlated with a significant reduction in GHG emissions in the subsequent years. This negative effect is stronger in countries with higher levels of financial development. Furthermore, we documented a positive impact on sovereign ESG scores, though this effect is more pronounced in lower-income economies and diminishes with a country's development level. Heterogeneity analyses revealed that the credibility signal of external verification is context-dependent: Its value is greatest in markets where credibility is scarce, such as in lower-ESG or less financially developed countries. Our findings highlight that the efficacy of green bonds is not uniform but is critically shaped by a nation's economic structure, financial sophistication, and existing sustainability trajectory. These results offer nuanced policy implications for designing targeted green finance strategies to maximize their environmental and financial returns.
