research topics on sustainable finance

Sustainable Finance Research Platform

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The Sustainable Finance Research Platform aims to support a successful sustainability transformation.

How can financing conditions be created that foster investments in sustainability and promote a long-term restructuring of capital flows? What are the risks and opportunities associated with climate change and the transition it requires? What is relevant sustainability information and how can we make it so that players in the financial and real economy benefit from communicating this information transparently?

Sustainable investments

Sustainability risks and chances

Sustainability reporting

Current topics

Corporate sustainability reporting directive (csrd).

Mit der Corporate Sustainability Reporting Directive (CSRD) will die Europäische Union einheitliche Standards für Nachhaltigkeitsberichterstattung etablieren.

„Greenhouse Gas Protocol: Asia-Pacific firms have work cut out on meeting climate-disclosure requirements, executive implementing standard says“

Alexander Bassen leads GHG Protocol’s new Independent Standards Board

Invitation to the WPSF Research Seminar

More than ‘green’ and ‘brown’: How sustainable finance can enable the transition

Publications, pb 2/2024: enhancing comparability and credibility of transition plans and transition risk assessment with standardized net zero scenarios.

Transition plans by non-financial and financial corporates can fulfill  two central purposes: they can facilitate strategic planning towards net zero 2050 while also helping detect…

PB 1/2024: Climate Risks and the Cost of Debt: Why Climate Policy Matters

Climate policy is key to achieving the required CO2 emission reductions for the transition towards a sustainable low-carbon economy. Climate policy causes direct and indirect…

PB 3/2023: Climate transition plans: State of play in EU legislation and policy recommendations

Company transition plans (of real economy and financial market actors) have the potential to become a steering instrument for directing capital flows toward climate neutrality…

PB 2/2023: The role of sustainable investments in the transformation: (further) education as a key element

Sustainable investments can be an important building block in the transformation of the economy and society. There has recently been a growing interest in sustainable…

PB 6/2022: The first ECB bottom-up climate stress test: dealing with data gaps and methodological challenges

The ECB’s “SSM Climate risk stress test,” published in July 2022, provides an important step toward integrating climate change related risks into the banking system.…

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World-leading researchers in sustainable finance

Both financial institutions and the broader financial system must manage the risks and capture the opportunities of the transition towards sustainability. The University of Oxford has world-leading researchers and research capabilities relevant to understanding these challenges and opportunities.

We work globally across asset classes, finance professions, and with different parts of the financial system.

Established in 2012, the Oxford Sustainable Finance Group (OxSFG) is a world-leading, multi-disciplinary centre for research and teaching in sustainable finance. We are the largest such centre globally and are the focal point for Oxford’s capabilities in sustainable finance.

Oxford Sustainable Finance Group research clusters, projects, programmes, and special initiatives

Climate & environmental analytics, machine learning & data science, spatial finance, stranded assets & transition finance.

Energy Transition Risk & Cost of Capital

Sectoral data quality and integrity project.

The Oxford Martin Initiative on Net Zero Recovery

The oxford martin programme on systemic resilience, the oxford martin programme on the post-carbon transition, natural language processing for sustainable finance (nlp4sf), skoll centre for social entrepreneurship.

A diverse, equitable and inclusive learning community of academics, practitioners and students from around the world. Pioneering global learning in Social Entrepreneurship, Systems Change and Knowledge Equity.

Oxford Rethinking Initiative

The Oxford Initiative on Rethinking Performance (ORP) aims to develop a framework for the measurement and operationalisation of corporate purpose.

This will enable sustainable and long-term focussed business behaviour to thrive for the benefit of the economy, investors, planet and society.

Sustainable Finance Research Forum

The open platform for policymakers, academics, and financial sector community to share experiences and approaches

Join the Sustainable Finance Research Forum!

Our platform provides a space for academics, policy officers, and financial practitioners to discuss approaches and experiences that strengthen the role of open science and knowledge-sharing between the financial sector and the research community.

Our Forum is committed to providing both established and emerging knowledge and scientific support on various issues related to sustainable finance .

Here are some relevant examples:

• Financial implications of climate change
• The role of the financial system in supporting the transition to a more sustainable economy
• Financial instruments and best practices that support the transition
• Directing financial flows towards research and development of sustainable technologies
• How environmental and social aspects can complement each other for an effective transition and their financial implications for the industry and policymakers in Europe
• How innovative financing instruments and technologies, such as artificial intelligence, blockchain, internet of things, and machine learning, can support the transition.

Join us in exploring these crucial topics and building a sustainable future!

Suscribe to our newsletter!

Upcoming events

• Conferences and summits
• External event
• Training and workshops

The Sustainable Finance Research Forum ecosystem

The JRC Summer School on Sustainable Finance takes place annually and brings together the community of academics, policymakers and professionals who work on topics related to Sustainable Finance.

We interview leading economists and practitioners in the Sustainable Finance business.

JRC publications on Sustainable Finance

Materials from the Sustainable Finance Research Forum past events

JRC support to Environmental, Social and Governance Risk Management Framework for the financial sector

Sustainable finance related publications by JRC partners and other parties

To find out more about the JRC's work on similar topics, explore the related JRC portfolios:

Healthy biodiversity and natural capital accounting.

Understanding and acting on risks and opportunities of the future.

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Article Contents

Sustainable finance.

• Article contents
• Figures & tables
• Supplementary Data

Alex Edmans, Marcin Kacperczyk, Sustainable Finance, Review of Finance , Volume 26, Issue 6, November 2022, Pages 1309–1313, https://doi.org/10.1093/rof/rfac069

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Sustainable finance—the integration of environmental, social, and governance (“ESG”) issues into financial decisions—is an increasingly important topic. Within companies, sustainability is no longer an ancillary issue confined to corporate social responsibility departments, but a CEO-level issue fundamental to the core business. Within the investment industry, sustainability used to be the exclusive domain of “socially responsible investors” who had social as well as financial objectives, but is now mainstream and includes investors with purely financial goals. This article introduces the RF Special Issue on Sustainability. It highlights three reasons for the rapid rise in sustainable finance—its financial relevance, its contribution to nonfinancial objectives, and investor tastes. It then summarizes the eight articles in the Special Issue, in particular drawing out their contributions to the literature. Finally, we offer ideas for future research.

Sustainable finance—the integration of environmental, social, and governance (“ESG”) issues into financial decisions—is an increasingly important topic. Within companies, sustainability is no longer an ancillary issue confined to corporate social responsibility departments, but a CEO-level issue fundamental to the core business. Within the investment industry, sustainability used to be the exclusive domain of “socially responsible investors” who had social as well as financial objectives, but is now mainstream and includes investors with purely financial goals. More broadly, the sustainability of business has a crucial impact on how it is viewed by wider society, including policymakers and citizens, including its social license to operate.

The increasing interest in sustainability among investors—which, in turn, flows through to companies—stems from three forces. The first is financial relevance . Companies with a positive impact on society may be more likely to attract customers and employees, capture business opportunities related to societal trends such as climate change and financial inclusion, and avoid environmental fines or regulatory intervention. If these benefits are not fully priced in, such companies will generate high risk-adjusted returns, and thus even investors with purely financial motives will prefer them. The second is nonfinancial objectives . For example, a pension fund invests on behalf of its beneficiaries, who care not only about their income in retirement but the state of the planet and the cohesiveness of society. Thus, they may support a company increasing its societal impact even if doing so sacrifices profits.

The third is tastes— that investors prefer to hold “green” stocks over “brown” stocks. Note that the second and third channels are subtly different. Under the second channel, a sustainable investor would only sacrifice financial returns if doing so has a causal impact on societal returns—for example, divesting from a “brown” stock increases its cost of capital and hinders it from expanding. Under the third channel, no causal effects are necessary. Even if the supply of capital is perfectly elastic, so divestment has no price impact, a sustainable investor will still boycott a brown stock since she suffers disutility from holding such a company. 1

Due to this increasing importance, the Review of Finance launched a Special Issue on Sustainable Finance. Among 176 submissions we received between June and December 2021, we aimed to publish papers that meet the following ordered criteria: (i) papers that are high-quality academic work; (ii) papers that are of interest to a mainstream finance audience, not only readers who work in sustainable finance; (iii) papers that have implications for both theoretical and empirical research, and for both academia and practice. We sought to publish papers across all major research areas: corporate finance, asset pricing, financial intermediation, behavioral finance, and mutual funds. This Special Issue contains eight papers that satisfied the above criteria. We summarize their content and placement in the broader discussion on the topic in the order in which they appear in the issue. We would like to emphasize the important role of the reviewers, whose hard work has enabled us to put this issue together. Their input has been invaluable to the success of this endeavor.

One key challenge in sustainable finance is how to evaluate the sustainability of a company. In “Aggregate Confusion: The Divergence of ESG Ratings,” Florian Berg, Julian Koelbel, and Roberto Rigobon document a significant discrepancy between the ESG ratings issued by six prominent ESG rating agencies: Sustainalytics, Moody’s ESG (formerly Vigeo-Eiris), S&P Global (formerly RobecoSAM), Refinitiv (formerly Asset4), MSCI, and KLD (discontinued in 2017). They found an average pairwise correlation between rating agencies of 38%-71%, substantially lower than the 99% for credit ratings. They found that 56% of the divergence stems from measurement (e.g., labor practices could be measured by workforce turnover, or number of labor cases against the firm), 38% is due to scope (e.g., some rating agencies consider lobbying an ESG factor, others do not), and 6% results from different weightings. Their findings have important implications for both academics and practitioners. For academics, the choice of rating agency for empirical research is not innocuous, and it is important to demonstrate robustness to other providers. For practitioners, ESG ratings should be viewed as opinion, not fact. Responsible investors should not choose stocks by simply following one provider’s rating.

Given information about a company’s ESG performance, how does it affect asset prices, both theoretically and empirically? “A Sustainable Capital Asset Pricing Model” by Olivier David Zerbib is an important step in answering these questions. The article proposes a model in which sustainability features as an important force driving investors’ portfolio decisions. The main contribution of the article is to show that expected returns can be decomposed into a part that reflects the negative exclusion preferences, along the lines of Merton (1987) , and the part that reflects tastes for ESG. Using the evidence from USA sin stocks, the article shows that the exclusion forces contribute about 2.7% per year to the observed risk premia and the taste forces add on roughly 2% per year extra.

Many commentators point to the growth in assets under management by UN Principles for Responsible Investment (“PRI”) signatories, from $6.5 trillion in 2006 to $121 trillion by the end of 2021, as evidence of the rise in sustainable investing. But does signing the PRI mean anything? In “Do Responsible Investors Invest Responsibly?”, Rajna Gibson Brandon, Simon Glossner, Philipp Krueger, Pedro Matos, and Tom Steffen study whether signatories invest in firms with higher ESG ratings, measured using either Sustainalytics, Refinitiv, or MSCI scores. They find that non-US signatories have superior ESG portfolio-level ESG scores than nonsignatories. However, in the USA, signatories have at best similar ESG ratings, or worse ratings if they have underperformed recently, are retail-client facing, and joined the PRI late—indicators that they may have signed the PRI to greenwash. An alternative explanation is that US investors buy ESG underperformers and engage with them to improve their ratings, but the authors find no such improvements. The different behavior of investors in the USA may be due to commercial incentives to become a PRI signatory being higher, more regulatory uncertainty as to whether ESG investing is consistent with fiduciary duty, and the lower maturity of the ESG market making it easier to greenwash.

One potential explanation for such behavior is that it is not clear that green investors should be avoiding brown stocks once you take into account the importance of hedging. How to hedge the risks in the presence of climate-related externalities is the topic of the theoretical piece “Asset Prices and Portfolios With Externalities” by Steven Baker, Burton Hollifield, and Emilio Osambela. In their model, agents who suffer disproportionately from pollution have a desire to hedge against this. If states in which pollution is high are also states in which polluting firms do well, then investing in polluting firms becomes a natural hedge. Environmentalists, who take pollution as given, will then invest disproportionately in polluting firms in order to hedge this risk, thus driving up capital allocations into such firms. In the process of understanding the economic mechanism behind their results, the authors also consider two countervailing forces that could reverse the surprising results on returns and investments: (i) investors coordinate so that they internalize their effect on pollution and (ii) investors derive nonpecuniary benefit from investing in nonpolluting firms.

Nickolay Gantchev, Mariassunta Giannetti, and Rachel Li tackle the question of whether investor behavior can affect company behavior in “Does Money Talk? Divestitures and Corporate Environmental and Social Policies.” They study whether governance through exit can improve firms’ environmental and social (E&S) policies. The authors find that negative E&S incidents are indeed followed by divestitures, but the magnitudes are relatively small. The authors conjecture that even more powerful than actual exit upon an E&S incident might be the threat of future exit if E&S performance remains poor. Consistent with this conjecture, after an E&S incident, firms decrease their greenhouse gas emissions and improve their E&S scores significantly if they have a high proportion of E&S-conscious investors and the CEO recives equity compensation so is concerned about the effect of investor exit on share prices. These results suggest that the threat of exit improves E&S performance if investors are E&S-conscious and CEO wealth is tied to the stock price.

Much of the financial costs associated with climate finance relates to transition risk ensuing from uncertain technological, political, and policy environment. But financial costs could also result from physical damages affected by climate-related events. The extent to which such physical risk is reflected in asset prices is a topic of “Climate Change Risk and the Cost of Mortgage Credit” by Duc Nguyen, Steven Ongena, Shusen Qi, and Vathunyoo Sila. The authors study the question in the context of mortgage markets. This setting is different from other studies that directly focus on valuations of climate-affected assets, such as real estate or insurance companies. Using data on 1,581,600 first-lien 30-year mortgages from BlackKnight McDash originated in the USA between January 1992 and June 2018 the authors document that financing costs of houses that are exposed to more sea level rise see higher interest rate spreads which are 10.2 basis points larger for mortgages in a zip code where all properties are exposed to SLR relative to a zip with no sea level rise. The interesting feature of this result is that, even though some of the risks may be still distant in the future financial, markets already price them in through the credit contracts.

While much of the literature on sustainable investors’ concerns institutions, Anders Anderson and David Robinson study household investors in “Financial Literacy in the Age of Green Investment.” They survey a large sample of Swedish households on their environmental preferences, such as the relative importance of environmental versus financial goals to them, and show that green households, surprisingly, do not hold green portfolios. One explanation is financial disengagement. Green households are generally uninterested in investing, being less likely to own stocks, check pension balances, or make active pension choices (instead relying on the default allocation). The second is informational constraints, which prevent households from finding investments that match their preferences. For example, they buy mutual funds with pro-environmental names even if they are not ESG-compliant, as classified by the Swedish Pension Authority. Many practitioners and policymakers argue that “people’s capitalism” will force companies to improve environmental performance, but the authors’ results suggest that, without financial literacy, households are unable to reflect their preferences in actions.

Finally, an important question pertaining to sustainable finance relates to portfolio ownership, incentives driving decisions, and performance consequences for investors with designated sustainable principles. In “Responsible Hedge Funds” Hao Liang, Lin Sun, and Melvyn Teo study this question in the context of hedge funds. They show that hedge funds that endorse the PRI underperform other hedge funds after adjusting for risk but attract greater investor flows, accumulate more assets, and harvest greater fee revenues. The authors attribute the main explanation of their findings to the apparent disconnect between the stated mandate and the observed exposure of investors to ESG factors, which is consistent with the story of greenwashing frequently brought up by ESG skeptics.

While we believe that these eight papers make substantial contributions to the area of sustainable finance, many questions are still to be answered. We repeat here the potential research directions that we included in the Call for Papers (with some additions) in the hope that they might spark future research. Needless to say, the Review of Finance will strive to consider high-quality papers that address the following questions for publication in regular issues:

Research on different aspects of sustainability—not only climate but environmental issues beyond climate (including financing of biodiversity protection), and other stakeholders such as employees, customers, communities, and suppliers.

Research using non-US data, studying private companies, or asset classes other than equity.

Research on how company practices (e.g., reporting, signing commitments, governance structures) help to embed sustainability, and how investors do so within their investee companies.

The effect, and potential unintended consequences, of policy and regulation on sustainability.

Research on the extent to which asset prices incorporate, or do not incorporate, sustainability, and whether this is through a cash flow and/or cost of capital channel.

Research on innovation and technological solutions to ESG issues.

Research on the adoption of green energy, emissions abatement, and the value of stranded assets.

Contrarian research, for example, showing that sustainable business practices may not be associated with superior long-term company performance; that sustainable investing may not achieve its desired objectives; or that companies/investors that claim to be sustainable may not actually “walk the talk.”

The effect of public attitudes and the media on sustainability, and the effect of company/investor sustainability practices on public attitudes.

Theoretical models of the effect of sustainable practices by companies, investors, and regulators.

Experimental or survey research on the households’, investors’, or executives’ sustainability preferences or beliefs.

Methodological papers on the evaluation/certification of sustainability datasets and giving best practice on which ones to use and any issues that arise.

Descriptive research that does not make causal claims, as long as “clean identification” is not central to the research question being addressed.

The moral philosopher Bernard Williams (1973) highlights the difference in the following example. Jim, on a botanical expedition in South America, finds himself in a town square. Twenty natives are tied up against the war and about to be killed for protesting against the government. Since Jim is an honored visitor from another land, the captain offers him the privilege of killing one of the natives himself; if he does so, the other natives will be let off. Even though the “societal return” from killing the native is positive, Jim may choose not to do so due to tastes—he suffers disutility from killing.

Merton R. C. ( 1987 ): A simplemodel of capital market equilibrium with incomplete information , Journal of Finance 42 , 483 – 510 .

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Williams B. ( 1973 ): A critique of utilitarianism, in Williams B. , Smart J. J. C. (eds.), Utilitarianism: For and Against . Cambridge University Press , Cambridge .

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• Published: 20 December 2023

Emerging new themes in green finance: a systematic literature review

• H. M. N. K. Mudalige   ORCID: orcid.org/0000-0002-4497-4750 1  

Future Business Journal volume  9 , Article number:  108 ( 2023 ) Cite this article

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Metrics details

There is a need for an extensive understanding of the emerging themes and trends within the domain of green finance, which is still evolving. By conducting a systematic literature review on green finance, the purpose of this study is to identify the emerging themes that have garnered significant attention over the past 12 years. In order to identify the emerging themes in green finance, bibliometric analysis was performed on 978 publications that were published between 2011 and 2023 and were taken from the databases of Scopus and Web of Science. The author examined annual scientific production, journal distribution, countries scientific production, most relevant authors, most frequent words, areas where empirical research is lacking, words' frequency over time, trend topics, and themes of green finance. The outcome of the review identified the following seven themes: (i) green finance and environmental sustainability; (ii) green finance and investments; (iii) green finance and innovation; (iv) green finance policy/green credit guidelines; (v) green finance and economy; (vi) green finance and corporate social responsibility; (vii)trends/challenges/barriers/awareness of green finance. The analysis of these emerging themes will contribute to the existing corpus of knowledge and provide valuable insights into the landscape of green finance as it evolves.

Introduction

Cities will face their greatest challenges ever during the next 30 years, and three-quarters of the world's population will reside in urban areas by 2050 due to the unparalleled rate of urbanization as a result of population growth, resource scarcity, such as peak oil, water shortages, and food security [ 100 ].

One of the main challenges in building and maintaining sustainable cities is discovering the sources required to fund vital infrastructure, development, and maintenance activities that have a sustainable future. To achieve the creation of sustainable cities, there is a need for green projects via green financial bonds, green banks, carbon market tools, other new financial instruments, new policies, fiscal policy, a green central bank, fintech, community-based green funds, and expanding the financing of investments that provide environmental benefits [ 26 , 78 ].

It is evident that green financing plays a crucial role in promoting sustainable initiatives. Thus, a transition from a rising economy to a green economy necessitates that a country's leadership offers green financing [ 112 ]. To assure green economic growth, nations around the world have invested in green projects to promote, invent, and employ environmentally friendly technologies to safeguard the environment and maximize environmental performance [ 55 ]. Because of new stakeholders' and institutions' understanding of environmental issues, regulatory authorities are likely to seek out extra ecologically acceptable financial resources. In an effort to establish environmental legitimacy, this type of environmental proactivity will be required when new methods of providing financial resources and green financing arise.

In numerous ways, the impact of adopting green financing is proven. First, green finance provides financial support for firms engaged in green innovation, including the purchase of green equipment, the introduction of new environmentally efficient technologies, and the training of their personnel. Second, green funding from various projects can assist stakeholders (organizations, governments, and regulators) in spending R&D funds on environmental challenges and minimize the associated risk with green legislation. Lastly, green policies have higher costs than conventional practices, and green finance can assist an organization in covering these expenses without encountering significant financial obstacles. As a result, green finance-driven economic growth can significantly support green policies, lessen environmental pollution, and build sustainable cities [ 128 ].

There have previously been systematic literature reviews conducted in the green finance area. However, a study's reliance on one database can exclude some recent developments in green finance from its analysis [ 93 ]. Findings from several databases could be compared and contrasted to create a more all-encompassing view of the area. Therefore, this study focuses on using Scopus and WoS databases.

Though additional methods, such as systematic literature reviews (SLR) and more complex network analyses such as co-occurrence of index terms, citations, co-citations, and bibliometric coupling, are available, previously conducted studies used a fundamental bibliometric technique [ 23 ]. A more detailed picture of the green finance study setting may emerge from an examination of the identification of various themes.

As part of a systematic review of the literature concerning emerging trends in green finance, it is critical to ascertain the dominant themes that are present in the field. By adopting this methodology, an intentional emphasis is placed on maintaining the review's relevance and excluding any studies that are obsolete. In addition, by identifying and classifying these themes, one can gain significant knowledge regarding the ever-changing characteristics of green finance, thereby illuminating the latest advancements and patterns. A study conducted by Pasupuleti and Ayyagari [ 99 ] identified different themes in green finance, but the researchers were only focused on polluting companies. By amalgamating insights from the literature review, one can attain a holistic comprehension of the current state of research in the field of green finance. Additionally, this process identifies areas where additional inquiry is necessary. Engaging in such an undertaking provides advantages not only to the scholarly community but also carries practical implications for policymakers, practitioners, and investors, assisting them in formulating effective policies and investment strategies and making well-informed decisions.

Green finance research is growing rapidly. However, the rising themes and trends in green finance literature must be comprehended. A comprehensive literature review can summarize current knowledge, identify research gaps, and identify the field's most relevant topics. This study seeks to uncover green finance's emerging themes through a rigorous literature review. This research aims to advance green finance knowledge by synthesizing and analyzing a wide range of scholarly articles.

Methods and methodology

Study selection process and methods.

In this study, a systematic literature review (SLR) was applied. It used inclusion criteria, analysis techniques, and a more objective method of article selection. As recommended for SLRs [ 65 ] with regard to the article selection process, the PRISMA article selection steps were adhered to. The steps are "identification," "screening," and "included". The steps that were taken in this study are shown in Fig.  1 .

PRISMA article selection flow diagram. Note : Search algorithm; “green finance” . Sources (s) Authors Construct, 2023

In the identification phase, the search terms, search criteria, databases, and data extraction technique are chosen. The keyword to use in the search was "green finance" as the study is aimed at identifying emerging themes in green finance.

The identified articles need to be screened in accordance with the PRISMA guidelines. The tasks carried out at the screening were the screening, retrieval, and evaluation of each article's eligibility. According to Priyashantha et al. in [ 103 ], articles in each task that did not meet the inclusion criteria were removed. The "empirical studies" published in "Journals" from "2011–2023" in "English" were the inclusion criteria for screening the articles. In 2023, up to May, the journal articles were chosen.

This screening was carried out both manually and automatically. Utilizing Scopus' and Web of Science's (WoS) automatic article screening features by study type, language, report type, and publication date, articles achieving the inclusion criteria "empirical studies" published in "English" "journals" from "2011–2023″ were included. The other publication types such as conference papers, book chapters, reviews, research notes, editor's comments, short surveys, and unpublished data, as well as non-English articles and articles published within the considered year range, were excluded. The full versions of the screened articles were then retrieved for the eligibility assessment, the next stage of screening. The author manually evaluated each article's eligibility.

Study risk of bias assessment

Researcher bias in article selection and analysis lowers the quality of reviews [ 8 , 102 ]. Avoiding bias in article selection and analysis requires using a review protocol, adhering to a systematic, objective article selection procedure, using objective analysis methods [ 8 , 102 ], and performing a parallel independent quality assessment of articles by two or more researchers [ 8 ]. By adhering to all of these requirements, the risk of bias in the articles was removed.

Methods of analysis

Biblioshiny and VOSviewer were used for bibliometric analysis. Green finance literature was captured by Scopus and WoS. These databases were used exclusively to get a representative sample of journal articles to study green finance articles. The data were collected and analyzed using Biblioshiny. Select databases can be systematically extracted and analyzed with the software. It collects year-by-year article distribution, journal distribution, country-specific scientific production, most relevant authors, most frequent words, word frequency over time, trend topics, density visualization, etc.

Trends and patterns were found by analyzing green finance paper distribution by year. This analysis shows green finance research's growth. By analyzing article distribution by year, we may also establish green financing and rising theme trends. To identify green finance research publications, article distribution was studied. Academic journal distribution can indicate green finance's prominence in various academic journals. Analyzing scientific production by region reveals regional green finance research tendencies. Scientific production across nations identifies knowledge-producing regions.

Analyzing influential green finance authors helps identify their contributions. This strategy acknowledges influential scholars. The research's most frequently used words reveal the fundamental questions and ideas of environmentally responsible economics. This analysis reveals the discipline's primary topics and studies. By counting words, it may focus on green finance's most important and widely used components. Word frequency can show how green finance's focus has shifted. By tracking word usage, it can identify trending topics. This analysis reveals changing green finance research priorities. Biblioshiny explores green financial trends. This study reveals new topics, research gaps, and subject interests. The trend themes allow us to evaluate green finance studies.

Results and findings

Study selection.

The PRISMA flow diagram illustrates that during the identification step, 528 articles from the WoS database and 1183 articles from the Scopus database that include the term "green finance" were identified. There were 402 duplicates, which were removed. The overall number of articles remained at 1302 at that point. Further attempts were made to include papers on empirical investigations in the final versions that were published in English. 34 non-English articles were thus disregarded. In addition, 295 papers from conferences, book chapters, reviews, news articles, notes, letters, abstracts, and brief surveys were not included. Two articles were disqualified because they were published before 2011. The next step was to retrieve the remaining 978 articles and transfer their pertinent data to an MS Excel file, including the article's title, abstract, keywords, authors' names and affiliations, journal name, citation counts, and year of publication. After that, each article was examined by a third party to determine whether it met the requirements for its eligibility.

Study characteristics

Main information.

This study examined 978 studies by 1830 authors from 59 countries. They've been published in 281 publications. The average number of citations each article received was 12.37. There were a total of 2206 keywords and 44,712 references. This information is detailed in Table  1 .

Annual scientific production

The fluctuations in green financing for scientific production are depicted in Fig.  2 . In 2011, two articles were published that demonstrated interest in this research. No publications were released in 2012, indicating a paucity of research or interest. The trend persisted in 2013 with two articles. One publication appeared in 2014, indicating a halt in research. Since 2015, scientific output has gradually increased. In 2015, three articles contributed to the development of green finance research. Two articles survived in 2016. With eleven articles published in 2017, green finance has become a significant area of study. In 2018, 23 articles were published; in 2019, there will be 42. With 45 publications in 2020, green finance research remains robust. Green finance research increased to 132 publications in 2021. This significant increase in articles on the subject indicates a growing interest in the matter. The publication of 403 research articles in 2022 represents a notable increase. This increase reflects the expanding literature on green finance and its academic significance.

Year-wise research article distribution. Source (s): Author created, 2023

Journal distribution

Table 2 consists of a list of journals that were included in the sample and had more than six relevant papers published inside the journals. The majority of the journals that publish articles relating to green finance are, unsurprisingly, those that focus on environmental science, renewable energy, and sustainability. This is despite the fact that finance is considered an essential component of green financing. Not a single journal in the field of finance was able to attract more than 10 papers.

Based on the number of papers, Environmental Science and Pollution Research emerges as the top journal, demonstrating a strong focus on comprehending the intersection between environmental science, pollution, and financial aspects. The prevalence of journals focused on renewable energy and sustainability, each of which publishes 50 papers, demonstrates the growing interest in examining the financial aspects of sustainable development and renewable energy sources. The fact that Resources Policy was included in the list of 49 papers indicates that a significant emphasis was placed on understanding the financial implications of resource management and extraction.

Green finance is interdisciplinary in nature, exploring the connections between finance and various environmental issues, as evidenced by the existence of interdisciplinary journals like Frontiers in Environmental Science. The existence of journals like Finance Research Letters and Economic Research-Ekonomska Istrazivanja highlights the importance of economic and financial analysis in the context of green finance.

Countries scientific production

The analysis of region frequencies in the provided data in Fig.  3 reveals intriguing patterns and highlights the varying levels of research focus in various countries. The analysis is focused on the top ten countries for scientific production on green finance.

China is the part of the world most frequently mentioned, with a striking frequency of 993. This suggests a significant research interest in comprehending and analyzing diverse aspects of China's economy, policies, and development. Given China's status as the world's most populous nation and its growing global influence, it is unsurprising that researchers have devoted considerable effort to examining China's position in various fields, including finance, sustainability, and innovation.

Pakistan follows with a frequency of 79, indicating a notable but relatively lower research emphasis. Researchers may have investigated particular Pakistan-related topics, such as its economy, governance, or social issues. Pakistan may be of particular interest to a subset of researchers, or there may be a paucity of relevant literature in the analyzed dataset.

With a frequency of 60, the UK is the third-most-mentioned region. This demonstrates a sustained interest in researching various aspects of the UK, such as its economy, financial sector, and policies. It is possible that the historical significance of the UK, particularly in terms of finance and international relations, contributed to its prominence in literature.

Most relevant authors

The prominent and active contributors to the discipline are shown in Fig.  4 . Wang Y has significantly added to the body of literature. The top authors have a constant record of publishing, which shows a dedication to knowledge advancement and suggests a high level of expertise in their field of study.

In this section, the findings that conform to the aims of the research are reported. The conclusions were generated through the use of trend themes, keyword co-occurrence analysis, "most frequent words," and "word frequency over time." During the course of the investigation, both the "keyword co-occurrence; network visualization" and the "density visualization" methods were applied.

Most frequent words

The analysis of the most frequent words sheds light on the emerging themes in the field of green finance, as illustrated in Table  3 and Fig.  5 . A significant emphasis on China, which appears 253 times in the literature, is one of the important observations. This indicates that China's initiatives and role in the context of sustainable finance and green investment are gaining increasing recognition. China's approach to green finance and its potential implications for global sustainability initiatives are likely the primary focus of researchers and policymakers.

The term "finance" appears 122 times, emphasizing the importance of financial mechanisms and instruments to the advancement of green initiatives. This emphasizes the significance of financial institutions, policies, and frameworks that support environmental protection and sustainable development. The frequency of the term "investment" (103) emphasizes the significance of allocating financial resources to environmentally friendly businesses and initiatives.

The 105 occurrences of "sustainable development" indicate the close relationship between green finance and broader sustainability goals. This indicates that researchers and practitioners recognize the need to align financial decisions with environmental, social, and governance (ESG) factors in order to achieve long-term sustainable development objectives.

The terms "green economy" (75) and "environmental economics" (57) refer to the integration of environmental considerations into economic systems and decision-making procedures. This emphasizes the importance of transitioning to environmentally sustainable economic models and policies.

The frequency of terms such as "carbon," "carbon emissions," and "carbon dioxide" (55, 55, and 51 times, respectively) indicates a focus on mitigating greenhouse gas emissions and addressing climate change via financial mechanisms. This is consistent with the worldwide drive for decarbonization and the transition to low-carbon economies.

In addition, the terms "innovation" (71), "impact" (67), and "efficiency" (49) emphasize the significance of technological advancements, measurable outcomes, and resource optimization in green finance. These ideas illustrate the ongoing pursuit of innovative strategies and solutions to promote positive environmental impact while maximizing resource utilization.

The terms "sustainability" (44), "policy" (49), and "financial system" (41) highlight the need for policy frameworks and a robust financial system to facilitate the incorporation of sustainability considerations into mainstream finance. These themes emphasize the critical role that regulations, incentives, and institutional arrangements play in promoting green finance practices and nurturing a sustainable economy.

In addition, the terms "climate change" (50) and "alternative energy" (42) suggest an emphasis on addressing climate-related issues and investigating renewable and sustainable energy sources. This demonstrates an acknowledgment of the role of green finance in the transition to a low-carbon, resilient future.

The relationships between the keywords depicted as nodes are displayed in Fig.  6 's keyword co-occurrence network visualization. The link shows how each keyword relates to the others. In particular, the thickness of the line indicates how strong the relationship is. As a result, Fig.  8 illustrates how China and green finance are connected by a thicker line, showing that the majority of green finance research is carried out in China. Additionally, the connection between finance, sustainable development, and investments in green finance shows their connection to green finance. In Fig.  6 , the nodes are grouped into the red, green, and blue clusters. These clusters contain the keywords listed in Table  3 for each one. The various clusters in Fig.  6 demonstrate how different areas of research had distinct effects on green financing. When keywords are grouped together, it indicates that the topics they refer to are quite likely to be the same. As a result, the red, green, and blue clusters in Fig.  6 highlight common themes, while Table  4 provides explanations for the clusters.

The keyword co-occurrence network visualization

Areas where empirical research is lacking

Figure  7 displays the density visualization map that the VOSviewer generated. The VoSviewer manual states that a node with a red background denotes sufficient research for established knowledge and that it is evident that more study on green finance is still needed. On the other hand, keyword nodes with a green background show that there hasn't been much research on those particular keywords. Other than finance and China, the other keywords in the figure are therefore in the green background, which denotes insufficient research.

The keyword co-occurrence density visualization

Word’s frequency over time

The analysis of words' frequency over time in Fig.  8 reveals a number of significant trends. Beginning in 2018, the frequency of the term "China" increases considerably, with a significant rise in 2022 and a peak of 253 occurrences in 2023. This indicates a growing emphasis on China's role in green finance and its expanding prominence in the academic literature.

The persistent occurrence of the term "finance" over the years indicates the sustained significance of financial mechanisms and instruments in the context of green finance research. Its increasing frequency over time demonstrates the continued emphasis placed on financial aspects of the field.

The consistent growth of the term "sustainable development" from 2016 to 2019 indicates a growing recognition of the connection between green finance and broader sustainability objectives. However, after 2019, its occurrence remains comparatively stable, indicating that sustainable development has become a well-established and consistent theme in the literature.

Similarly, the term "investment" has maintained a consistent presence throughout the years, indicating a continued emphasis on allocating financial resources to green and sustainable initiatives. Its frequency fluctuates but remains relatively high throughout the period under consideration.

The frequency of the term "economic development” increased gradually until 2021, after which it remained relatively stable. This indicates that researchers have acknowledged the need to incorporate economic development and sustainable practices, resulting in a continued emphasis on this topic.

Similar to the term "investments," it has maintained a consistent presence throughout the years. This demonstrates a persistent desire to investigate investment opportunities and strategies within the context of green finance.

The frequency of the term "green economy” increased until 2020, after which it stabilized. This demonstrates an ongoing commitment to transitioning to a greener and more sustainable economy.

The terms "innovation" and "impact" have exhibited a general upward trend over the years. This suggests that innovative approaches to measuring the impact of green finance initiatives and projects are gaining importance.

The term "green finance" has been used significantly more frequently, particularly after 2021. This demonstrates the increasing interest and focus on the specific discipline of green finance, reflecting its emergence as a distinct research area within the context of sustainable finance as a whole.

Trend topics

Insights into novel areas and their developments over time can be gained from an analysis of trend themes using author keywords in the bibliometric data, as shown in Fig.  9 .

Trend Topics

There are nine times where the "Paris Agreement" is mentioned as a subject. It was consistently present from 2019 to 2022, demonstrating a strong interest in comprehending the ramifications and execution of this global climate agreement. The Paris Agreement's effects on environmental regulations and attempts to slow down climate change were probably among the topics on which researchers concentrated.

Seven uses of the word "environment" show that it is a recurring subject. This implies maintaining a focus on environmental concerns and the interactions between human actions and the environment as a whole. It's likely that academics and researchers have examined numerous environmental concerns and their effects on various industries and regulations.

Six occurrences of "regional economy" are found in the literature. This shows a rise in interest in learning about the dynamics and growth of regional economies and how they relate to sustainable practices. The emphasis on regional economies indicates that scholars are looking at the regional and context-specific elements affecting sustainable development and economic progress.

Another subject with five mentions per topic is "crowdfunding". This shows that crowdsourcing is becoming more and more popular as a method of finance, especially for sustainable projects. Crowdfunding's ability to assist green projects, as well as the opportunities and challenges that come with it, has probably been studied by researchers.

With 631 occurrences, the topic "green finance" stands out due to its very high frequency and demonstrates its rising importance in the literature. This demonstrates a rise in interest in the nexus between finance and environmental sustainability. The methods, laws, and procedures that encourage financial investments in green projects and companies have probably been studied by academics and policymakers.

With 92 mentions, "China" stands out as being quite popular. In the context of green finance and sustainable development, this suggests a strong focus on China's participation. Researchers are probably looking at China's policies and initiatives and how they may affect international sustainability efforts.

The phrase "sustainable development" also comes up 70 times, demonstrating a steadfast interest in learning and implementing sustainable practices in a variety of fields. There is a good chance that academics have looked into the frameworks, policies, and tactics that help achieve long-term sustainable development goals.

Seventeen times are mentioned when the term "carbon neutrality" is brought up, which shows that efforts to achieve it are becoming more and more of a priority. To minimize greenhouse gas emissions and combat climate change, researchers have probably looked into a variety of strategies and regulations.

ESG (environmental, social, and governance) is a term with a frequency of ten references, which reflects the growing understanding of the significance of ESG aspects in investment choices and company practices. The incorporation of ESG factors into financial analysis and decision-making processes has probably been researched by researchers and practitioners.

Last but not least, the phrase "green finance policy" is used nine times, showing that policies that support and oversee green finance efforts are a particular emphasis of the study. It's likely that academics and policymakers have looked at how well these policies work and how they affect the growth of sustainable practices and investments.

In conclusion, study subjects that have attracted interest over time are shown by an analysis of trend topics in the bibliometric data. These themes show the continued attempts to understand and manage environmental concerns through research, policy, and finance, from global agreements like the Paris Agreement to specific topics like green finance and sustainable development.

Themes of green finance

This study uncovered a variety of topics relating to green finance as well as potential areas for further research. The descriptions of the themes are presented in Fig.  10 . Different themes related to green finance, along with significant studies that contributed significantly, are discussed below.

Green finance and environmental sustainability

In recent years, there has been a growing emphasis on the significance of green finance and environmental sustainability, leading to increased attention and focus in both academic research and practical applications. The world is currently experiencing an unparalleled environmental crisis, with issues like resource depletion, biodiversity loss, and climate change becoming more pressing. Green finance, which falls under the umbrella of sustainable finance, centers its attention on investments and financial methods that not only yield economic profits but also contribute to favorable environmental consequences.

Existing research mostly focuses on green finance and environmental sustainability in Asian countries, with specific focus on China. Green finance's function in low-carbon development has been thoroughly studied in relation to carbon emissions [ 13 , 147 ]. Green financing and renewable energy growth have also received attention, aiding China's clean energy revolution [ 4 , 12 , 20 , 21 , 40 , 49 , 51 , 56 , 61 , 67 , 72 , 75 , 76 , 80 , 85 , 89 , 97 , 104 , 105 , 107 , 109 , 110 , 119 , 121 , 129 , 135 , 144 , 145 , 149 , 169 , 172 ]. Environmental rules and green finance have also been studied to determine how well they promote sustainable financing [ 19 , 22 , 62 , 114 , 123 , 145 , 159 ].

When it comes to the study of regions outside of Asia, such as Africa, South America, and parts of Europe, there is a significant knowledge gap. It may be helpful to gain useful insights into regional variances and strategies if one is able to comprehend the various ways in which these various regions approach green financing and environmental sustainability initiatives.

Green finance and investments

Following a global shift toward sustainable and ecologically responsible economic practices, green finance and investments have developed dramatically.

Green bond quality and effectiveness, notably in China, is a major study topic. Green bonds finance ecologically friendly projects, therefore verifying their quality is crucial to green financial markets. To help green bonds meet sustainability goals, researchers have studied their quality procedures and standards [ 3 , 6 , 9 , 10 , 33 , 34 , 35 , 38 , 79 , 92 , 95 , 108 , 115 , 164 ]. The relationship between green and non-green investments is another frequent research topic. Researchers have studied the hedging or diversification impacts of these two assets. This study examines how green and non-green investments affect portfolio strategies, risk management, and the financial environment [ 1 , 116 ]. Another interesting relationship is natural resource richness, FDI, and regional eco-efficiency. Given global agreements like COP26, scholars are studying how natural resources and FDI effect regional ecological efficiency as states attempt to combine economic growth with environmental sustainability [ 15 , 36 , 42 , 143 , 157 ].

A key feature of green finance study is how financial institutions, integrate green investment and financing teams. The green finance agenda requires understanding how bank’s structure and behave to encourage sustainable investment. Green financial instrument creation and effect are another study topic. Researchers have examined green finance products including green bonds and minibonds to determine their performance and impact on environmental and sustainability goals. This field helps design policies and strategies to optimize industrial structures and promote sustainable development.

Green finance research examines how it affects industrial structures. Studies have examined how green finance initiatives including loans and investments optimize and shift industrial sectors toward sustainability. These findings are crucial for governments and business stakeholders seeking financial incentives for eco-friendly operations [ 12 , 31 , 46 , 57 , 85 , 96 , 124 , 130 , 139 ].

Green finance market interactions with financial variables must also be assessed for sustainable financial development. Researchers examine the relationship between green financial indices and other financial indicators to better understand how green finance affects the financial landscape [ 27 , 32 , 48 , 68 , 137 ].

Green finance and investments have many unexplored areas, presenting research opportunities. The behavioral dimensions of green investment focus on the psychological drivers and biases that influence investment choices; subnational and local initiatives, which are frequently ignored despite their crucial role in ecological action; cross-country comparisons to provide a more holistic view of effective green finance practices; the role and impact of green finance in emerging economies; and innovative green financial instruments like blockchain. Examining these lesser-known aspects could improve our understanding of sustainability in the financial sector and offer insightful information to investors, financial institutions, and legislators that want to make a positive impact on a more sustainable and environmentally friendly future.

Green finance and innovation

The convergence of green finance and innovation is a crucial topic that addresses the pressing global concerns of environmental sustainability and financial stability. Much study has been done on green finance and innovation, yet various themes and gaps emerge, demonstrating its complexity.

Green financing policies and instruments promote innovation, especially in environmental technologies and renewable energy. Many studies have studied how green funding affects green innovation and if it promotes sustainable technology. They've studied green bonds, green banking, and green finance reform laws, offering empirical evidence that financial incentives combined with green practices can stimulate environmental innovation [ 16 , 41 , 44 , 47 , 52 , 64 , 70 , 81 , 87 , 107 , 133 , 152 , 162 ].

The role of environmental legislation in green financing and innovation is another common theme. Researchers have studied how these restrictions affect green finance's impact on technology. Studying how financial policies and regulatory frameworks interact has helped explain the complex dynamics affecting innovation in environmentally sensitive industries [ 11 , 29 , 54 , 84 , 120 , 126 , 132 , 151 , 152 , 174 ].

Nevertheless, there are obvious gaps in the existing knowledge within the field. The effects of green finance on innovation have been extensively studied, but a better knowledge of the factors driving innovation in other areas is needed. Further study may reveal how green funding might boost innovation in non-environmental industries. How can financial mechanisms support sustainable transportation, agricultural, and urban planning innovation.

Further research is needed on education and the human element in green innovation. How green finance, educational investments, and innovation interact can help individuals, businesses, and societies develop a sustainable future. Green finance and innovation's impact on environmental adaptation and resilience also understudied. More research is needed to determine how financial mechanisms and new solutions may help communities and organizations adapt to climate change.

Green finance policy/green credit guidelines

Climate change and environmental degradation are major worldwide issues. Green finance, which promotes environmentally and socially responsible investments, is a key instrument in this battle. Research and discussion have focused on how green finance policies affect the economy and environment.

The switch to renewable energy is crucial to fighting climate change globally. This transition relies on green financing initiatives. Researchers are investigating how well such regulations promote renewable energy. They examined how green finance regulations affect renewable energy output, investment, and job development in this growing sector. Understanding these implications helps improve green finance initiatives for sustainability [ 18 , 98 , 118 ].

China and other nations have implemented green finance pilot programs to test the waters and stimulate innovation. This research evaluates pilot policy implementation and impacts. Scholars use synthetic control and other tools to study how these initiatives affect green innovation. The results help determine the real-world implications of such experiments and their potential for wider use [ 48 , 113 , 121 , 131 , 146 , 162 ].

Green financing policies vary worldwide. Comparative research of green financing rules can highlight policy differences among jurisdictions. Researchers compared the EU and Russia's green financing laws. These studies emphasize differences, similarities, and the potential influence of these policies on green finance development, promoting cross-border cooperation and knowledge exchange [ 60 , 125 ].

Monitoring and measuring green finance progress is essential for future development. Researchers are developing green finance indices to assess green finance in a country or region. These indices help policymakers, investors, and the public understand green finance's growth and potential [ 141 ].

Despite significant and informative research on green finance policies and their effects on the economy and environment, several research gaps and opportunities for additional investigation remain. First, a thorough evaluation of the durability and long-term sustainability of green finance policies is lacking in the literature. Many studies focus on short-term outcomes, but long-term planning and implementation need understanding these policies' long-term implications. Second, green finance policies' cross-border effects need greater study. As the global economy grows more interconnected, it's important to understand how regional policies affect others and the possibility for international collaboration. Green finance and social effects as creating employment and community development are understudied. Such studies could illuminate these policies' overall impact. Finally, additional multidisciplinary research combining economics, environmental science, and social science are needed to comprehend green finance policies' complex implications. Scholars can fill these gaps to improve our understanding of this crucial topic and inform sustainable policymaking.

Green finance and economy

The relationship between carbon intensity and economic development is a growing topic in green finance research. How nations may shift to low-carbon economies while maintaining economic growth has been studied. Several studies have quantified how green finance policies reduce carbon emissions and boost economic growth [ 63 , 71 , 122 , 155 , 175 ].

The study of the impact of green financing on agriculture, particularly in China, is gaining attention. Green financing impacts agricultural trade, sustainability, and food security, according to researchers [ 37 , 140 ]. Given its connection with economics, food production, and sustainability, this type of researches is crucial.

Efficient utilization of natural resources in Asian countries has gained attention for promoting green economic growth. Researchers have studied how nations might maximize economic gains from natural resources while reducing environmental harm. Addressing sustainable economic development concerns requires this area [ 86 , 101 , 146 , 166 ].

The significance of judicial quality in reducing emissions without hindering economic growth is a common issue in green finance research. Researchers examine how strong legal systems can enforce environmental laws and promote green practices while boosting the economy [ 154 ].

Even while the previously stated research topics have unquestionably enhanced our understanding of the intricacies of green finance, there are still a number of uncharted territories and research gaps that need to be investigated further. Currently, research on green finance mostly focuses on economic and environmental concerns. Integrated research combining economic, environmental, and social science is needed. It can provide a holistic view of green finance policy' many implications. The globalization of green finance policy has significant implications and cross-border effects. These policies' worldwide spillover effects and country collaboration are rarely studied. Research is lacking on how regional policies affect others and international cooperation.

Green finance and corporate social responsibility

Fostering CSR requires understanding how environmental regulations affect companies' sustainable strategies. Researchers should examine how CSR goals can be better aligned with regulations to improve environmental and social outcomes. Researchers have studied green finance-CSR approaches to promote sustainability. This research seeks to understand how green finance initiatives like green bonds and sustainable investment practices affect CSR performance [ 173 ]. Businesses and investors looking to maximize their environmental and social impact must understand these mechanisms.

One intriguing research topic is empirical evidence from heavily polluting enterprises, especially in China. This study shows how green finance can reduce environmental harm and promote CSR in industries with a high environmental impact [ 45 , 66 ]. Researchers can find ways to help heavily polluting companies become more sustainable by studying their experiences.

Bangladesh banks' CSR and green finance practices have also been studied [ 168 ]. This study studies how green financing affects financial institution CSR and environmental performance. Financial organizations can use these results to incorporate environmental responsibility while being profitable. Another relevant research topic is post-pandemic CSR practices as a business strategy to combat volatility and drive energy and environmental transition [ 53 ]. Understanding how CSR and green finance can help companies whether economic downturns and pandemics are crucial. This research can help businesses adapt to changing business conditions.

Further studies can explore socially responsible mutual funds and low-carbon economies. The impact of the investment industry on sustainability and environmental responsibility can be better understood by scholars by examining how these funds affect company behavior and investment decisions. Investors and businesses pursuing sustainable development may find these insights to be beneficial.

Green bond issuance is growing, thus study on its effects on company performance and CSR is needed. Investors seeking to support environmentally responsible businesses and companies contemplating green finance must have a comprehensive understanding of the repercussions on associated with green financing.

Trends/challenges/barriers/awareness of green finance

Regional patterns in China's green finance trends are well-studied, but little is known about applying these findings elsewhere, especially in countries with similar environmental issues [ 24 , 30 , 83 , 88 ]. Analysis of green finance growth by sector is common; however, there may be a knowledge vacuum about how sectors might learn from each other to create more successful sectoral plans [ 28 , 50 , 142 ].

Analyzing the structural barriers to green financing is vital, but also understanding how consumers, financial institutions, and governments can work together to close this gap is crucial. Political and institutional restrictions in green financing have been extensively examined, but cross-national comparisons might reveal similar concerns and inventive solutions. Cultural variety is crucial in ethical and green finance, but the challenges of adapting cultural methods to different places may not be adequately examined [ 7 ].

There were 213 papers pertaining to green finance research that were published between the years 2011 and 2021. However, between 2022 and May 2023, there was an enormous increase in the number of publications, which was 715. These publications can be found in Scopus and WoS. This spike can be associated with a number of causes that have encouraged both academia and industry to focus on sustainable and environmentally friendly practices. These drivers can be found in both the public and private sectors.

To begin, there has been a growing awareness of the urgent need to address climate change and its adverse impacts on the world. An increasing number of demands for action have accompanied this recognition. Green finance provides a means by which funds can be directed toward projects and investments that promote environmental sustainability, such as the development of sustainable infrastructure, clean technologies, and renewable sources of energy. In addition, global initiatives such as the Paris Agreement have put pressure on governments and financial institutions to align their strategies with climate goals, which has led to an increased demand for research on green finance practices and regulations [ 58 ]. Additionally, investors and consumers are becoming more aware of the environmental impact of their financial actions, which is contributing to an increase in demand for environmentally responsible investing products and services [ 39 ]. As a direct consequence of these developing tendencies, researchers and academics have developed responses to them, adding to the expanding body of literature on green finance.

993, more than any other nation, are references to China. This shows a keen interest in learning about China's economy, politics, and development. Researchers have concentrated on China's position in finance, sustainability, and innovation given its status as the world's largest population country and its growing global relevance due to its critical role in fostering sustainable and low-carbon development. Reduced energy use and waste are the goals of energy efficiency measures, which also have a positive effect on the environment by reducing greenhouse gas emissions. Researchers want to comprehend the procedures, regulations, and financial tools that can successfully encourage and support energy efficiency projects, which will ultimately contribute to a greener and more sustainable future. This is why they are focused on energy efficiency within the context of green finance [ 2 , 14 , 60 , 67 , 69 , 74 , 106 , 117 , 134 , 136 , 156 , 160 , 170 ].

The construction of pilot zones for green finance reform and innovations (GFRI) is a significant step the Chinese government has taken to build a green economy. Many authors have conducted surveys on China's GFRI policy and its impact on innovations. The GFRI policy program supports green innovation in large, polluting companies and urban green development by enhancing total factor productivity in pilot cities, emphasizing the importance of debt finance in corporate green innovation [ 40 , 82 , 148 , 150 , 153 , 158 ]. A different study by Wang et al. in 2022 [ 127 ] discovered that while the GFRP generally plays a positive role in fostering green technology innovation capabilities, the extent to which it has an impact varies depending on the region's resources, environment, and level of economic development, with middle- and high-income areas seeing a more noticeable impact. Wang et al. in 2022 [ 127 ] propose a green finance index, employing statistical indicators from 2011 to 2019, to analyze China's green finance development and predict its growth from 2020 to 2024. New energy, green mobility, and new energy vehicles have boosted China's green finance index during the previous nine years, according to research.

The Green Financial Reform and Innovation Pilot Zones (GFPZ) policy's effect on the ESG ratings of Chinese A-share listed firms between 2014 and 2020 is examined in another study. The findings showed that the GFPZ policy raises ESG scores, which are mainly based on social responsibility, and helps businesses in the pilot zones do better financially and environmentally [ 17 ]. In 2023, Shao and Huang [ 111 ] reviewed China's green finance policy mix, showing a shift toward market-based approaches and greater private sector engagement, influenced by dynamic vertical interactions between different levels of government.

Chen et al. [ 14 ] examined the response of China's equity funds to institutional pressure on green finance in 2021. The results showed that funds with negative screening strategies, which exclude environmentally harmful investments, have higher green investment levels and higher financial returns, while funds with positive screening strategies face negative investor reactions despite their green investments.

A study done by Lv et al. [ 88 ] found that while green finance development in China is improving, regional disparities and a polarization trend exist, requiring measures to narrow the gap and promote coordinated development across economic regions. Because it is crucial for striking a balance between economic development, environmental conservation, and social well-being, researchers in green finance concentrate on sustainability. The authors focused on studies on sustainable investment options, analyzed how environmental, social, and governance aspects are incorporated into financial decision-making, and evaluated how sustainability affects financial performance. Researchers are expected to advance ethical and sustainable financial practices and help the world accomplish its sustainability goals by studying sustainability within the context of green finance [ 5 , 25 , 43 , 46 , 59 , 73 , 77 , 90 , 91 , 94 , 104 , 109 , 138 , 161 , 163 , 165 , 167 , 171 ].

In conclusion, research on green finance has primarily focused on Asian countries, particularly China, where it plays a crucial role in low-carbon development and renewable energy growth. However, there is a significant knowledge gap in regions outside Asia, such as Africa, South America, and parts of Europe. Further research is needed to understand regional variances and strategies in these areas.

Studies have examined various aspects of green finance, including green bond quality, the relationship between green and non-green investments, and the impact of green finance on environmental and sustainability goals. Behavioral dimensions of green investment, subnational and local initiatives, cross-country comparisons, and the role of green finance in emerging economies have also been explored. Additionally, the role of green finance in stimulating innovation in environmental technologies and renewable energy has been studied, but there are gaps in understanding its impact on non-environmental industries and the human element in green innovation.

Further research is needed to understand the role of environmental legislation in green finance, its impact on technology, and its cross-border effects. The durability and long-term sustainability of green finance policies should also be examined, along with their social effects such as employment creation and community development. The relationship between carbon intensity and economic development, as well as the alignment of corporate social responsibility goals with environmental regulations, are important areas for investigation.

There is a need for more research on applying the findings from China's green finance trends to other countries facing similar environmental issues. Structural barriers to green financing should be analyzed, and the collaboration between consumers, financial institutions, and governments in closing this gap should be explored. Cultural diversity in ethical and green finance should also be considered, along with the challenges of adapting cultural methods to different places. Overall, further research in these areas can contribute to a more sustainable and environmentally friendly future.

When compared to other fields of study, it is clear that research on green finance has not been investigated to the same extent. In contrast to the less-researched areas of carbon, carbon emissions, climate change, financial systems, policymaking, agriculture, CSR, supply chain, risk management, corporate strategy, regional planning, and governance, green financing has been well-liked with investments, sustainable developments, green innovations, and green economies. On the other hand, taking into account the growing attention paid to sustainability on a worldwide scale and the pressing need to find solutions to the problems posed by the environment, it is quite likely that research into green finance will become more important in the years to come.

The increasing significance of sustainable development and the change to an economy with lower carbon emissions will require the development of innovative financial solutions to support green initiatives and assist the shift toward a financial system that is more friendly to the environment and more sustainable. It is anticipated that researchers will devote a greater amount of attention to green finance as the level of awareness regarding the environmental and social impacts of financial activities continues to rise. These researchers will investigate topics such as sustainable investment strategies, green bond markets, sustainable banking practices, and the incorporation of environmental considerations into financial decision-making. In addition to this, the incorporation of environmentally friendly financial practices into policy frameworks and regulatory measures further emphasizes the requirement for research in this particular area. In general, it is projected that research on green finance will pick up steam in the years to come because it plays such an important role in the process of sculpting a financially sustainable and resilient.

Availability of data and materials

SCOPUS and WoS databases.

Abbreviations

Corporate social responsibility

Financial Technology

Green finance reform and innovations

Green Financial Reform and Innovation Pilot Zones

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Mudalige, H.M.N.K. Emerging new themes in green finance: a systematic literature review. Futur Bus J 9 , 108 (2023). https://doi.org/10.1186/s43093-023-00287-0

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Welcome to the Sustainable Finance Research Centre

The global dialogue on sustainable development revolves around integrating environmental considerations with societal concerns to promote human well-being while ensuring the needs of future generations are met. This shift signifies a departure from a narrow focus on economic growth towards a more comprehensive approach to development.

The concept of "sustainable development" was first introduced in the landmark Brundtland Report of 1987. In response, the United Nations established the World Commission on Environment and Development to address urgent global challenges. The commission's report, titled "Our Common Future," laid the groundwork for the Earth Summit in 1992 and the subsequent formation of the Commission on Sustainable Development.

Achieving sustainability requires a collaborative, multidisciplinary effort. While disciplines like natural and social sciences have long embraced sustainability principles, the fields of finance and investment have more recently become integral to this conversation. New branches such as ESG (Environmental, Social, and Governance), climate risk assessment, and green finance have emerged to address these pressing concerns.

The increasing significance of sustainability in finance and investment, exacerbated by the pressing climate crisis, highlights the imperative for academic research to refine theoretical frameworks and emphasize empirical studies that advocate for nature-positive solutions. To bridge the divide between research and industry application, we established the Sustainable Finance Research Centre in partnership with the Institute of Finance at Corvinus University of Budapest.

Our center specializes in empirical research focused on understanding how financial markets and investments influence sustainability. As environmental and societal challenges intensify, there is a growing necessity to reevaluate asset ownership, shareholder value, true cost funding, and the comprehensive evaluation of impacts, including externalities. The responsibility for ensuring a sustainable future rests with all stakeholders—individuals, businesses, and governments alike.

Our lateset working paper on Biodiversity Risk Premium is available on SSRN.

• Mistra Center for Sustainable Markets
• Misum Research
• Past programs
• Misum research platforms 2015-2019
• Other Sustainable Finance Research

Sustainable finance research projects

Longtermism in investment analysis:   To deliver on the 2030 agenda, financial decisions need to better align with sustainability priorities. This project explores critical barriers for investment analysis to adopt longer time horizons. Data is collected from buy-side and sell-side financial analysts as well as corporate investor relations officers. Contact: Dr  Hanna Setterberg and Dr  Emma Sjöström

Integrating ESG in the capital market conversation : Contact: Dr. Hanna Setterberg , Dr. Sanne Frandsen , Prof. Mette Morsing

ESG integration as ongoing implementation:  There is a strong concern, in the sustainable investment field, of doing ESG “for real”. This is typically understood as ESG playing a role when and where important decisions are made, and that different types of expertise and calculations are ‘integrated’. The study explores how that concern becomes manifested in the day-to-day work of ESG analysts and portfolio managers, and theorizes what enables and hinders it. Building on interviews and observations in investor organizations, primarily within asset managers, it studies practices of making ESG happen within investment analysis, decision-making and portfolio company dialogue. Contact :   Emilia Cederberg

Sustainable crowdfunding Sustainable entrepreneurs and small start-ups face a myriad of challenges in terms of pursuing their sustainably-oriented ventures not least the locked-in nature of the system which they inhabit and intend to change; as they often go against existing user and industrial practices, regulation, infrastructure and symbolic meanings. These lock-ins consequently also translate into constrained funding opportunities for these "niche innovators", especially in the early "seed funding" stage as they often perceived as a less attractive investment compared to traditional entrepreneurial ventures. The emergence of crowdfunding could, however, signal a shift in financing opportunities for these small sustainable innovators brought on by a shift in prospective financiers of innovation from professional investors to now ordinary citizens (i.e. crowdfunders). Especially since the early literature on crowdfunding has found that rather than focusing on economic gains and feasibilities, the crowdfunders put much more emphasis on the core values and legitimacy of a project. Leading some scholars to suggest that crowdfunders are more likely to invest in sustainable ventures others, however, question this contention instead noting that there is no positive connection between for example environmental orientation and crowdfunding success. The research conducted at respectively CBS and Misum therefore aims at examining what, if any, potential role the "crowd" could have in driving, financing and enabling sustainable entrepreneurship and innovation.

Current Papers: Gallemore, C., Nielsen, K. R., & Jespersen, K. (2019). The uneven geography of crowdfunding success: Spatial capital on Indiegogo. Environment and Planning A: Economy and Space. Retrieved from https://doi.org/10.1177/0308518X19843925

Nielsen, K. R. (2017). Crowdfunding for Sustainability: A Study on the Potential of Reward-based Crowdfunding in Supporting Sustainable Entrepreneurship. Copenhagen Business School [Phd] - PhD Series, No. 35.2017.

Nielsen, K. R. (2018). Crowdfunding through a partial organization lens - The co-dependent organization. European Management Journal, 36(6), 695–707. Retrieved from https://doi.org/10.1016/j.emj.2018.01.006

Testa, S., Nielsen, K. R., Bogers, M., & Cincotti, S. (2019). The role of crowdfunding in moving towards a sustainable society. Technological Forecasting and Social Change, 141, 66–73. Retrieved from https://doi.org/https://doi.org/10.1016/j.techfore.2018.12.011

Contact:  Kristian Roed Nielsen

Finance and Innovation Researching the emergence of low carbon industries. Contact:  Max Jerneck

Microfinance and financial inclusion   Microfinance has become a powerful force in improving the conditions of small and micro enterprises and other vulnerable group across the world. Misum researchers have explored microfinance and its impact on vulnerability, assets, income, training and women empowerment.   Current research includes microfinance and gender.   Contact:   Ranjula Bali Swain

Sustainability reporting and materiality. Materiality assessment constitutes a set of claims and information on ‘what matters’ in corporate sustainable performance. Instead of a unified understanding of what information on corporate performance is material, there are, in fact varying, perhaps conflicting, views that ultimately lead to different constructions of corporate sustainability. We look at materiality more of an opinion rather than a neutral value-free measurement by questioning the taken-for-granted technical-rational understanding of sustainability as something objectively measurable, and the varying sustainability topics as commensurable. This research contributes to the socio-political role of materiality assessment in sustainability reporting literature and discuss the potential of materiality assessment to advance more inclusive accounting and reporting practices, in particular critical dialogic accounting.  

Newest publication:

https://www.emeraldinsight.com/doi/full/10.1108/AAAJ-11-2016-2788

Contact:  Jenni Puroila

Sustainable Investments Contact:  Svetlana Gross

Theory of Sustainable Finance There is currently a growing consensus that the financial system falls short of fulfilling its social purpose. This not only poses a practical challenge for the world’s leaders, but also a theoretical challenge for researchers: to rethink the role of finance in society. According to the dominant theory, rooted in neoclassical economics, financial agents should always adopt the practices which maximize the value of the firm. This project seeks to develop an alternative theory of the social role of finance, which can bolster more responsible and sustainable financial behavior. The project is a collaboration with the   Financial Ethics Research Group   at University of Gothenburg.

Contact:  Joakim Sandberg

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Open Access

Policies for climate finance: Status and research needs

* E-mail: [email protected]

Affiliations Climate Finance and Policy Group, Institute for Science, Technology and Policy, ETH Zurich, Switzerland, Center for Energy and Environmental Policy Research, Massachusetts Institute of Technology, Cambridge, MA, United States of America

Affiliations Institute for Political Science, University of Zurich, Zurich, Switzerland, Perspectives Climate Research, Freiburg, Germany

• Bjarne Steffen, 
• Axel Michaelowa

Published: October 3, 2022

• https://doi.org/10.1371/journal.pclm.0000083
• Reader Comments

Citation: Steffen B, Michaelowa A (2022) Policies for climate finance: Status and research needs. PLOS Clim 1(10): e0000083. https://doi.org/10.1371/journal.pclm.0000083

Editor: Jamie Males, PLOS Climate, UNITED KINGDOM

Copyright: © 2022 Steffen, Michaelowa. This is an open access article distributed under the terms of the Creative Commons Attribution License , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Funding: BS acknowledges funding from the European Union’s Horizon 2020 research and innovation programme, European Research Council (ERC) (Grant Agreement No. 948220, Project No. GREENFIN). The funder had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.

Competing interests: The authors have declared that no competing interests exist.

Reaching a greenhouse gas emissions pathway in line with the Paris Agreement commitments will require a fundamental transformation of global economies along with massive investment needs [ 1 ]. In the energy sector, for example, a 2°C pathway translates into an annual investment need of 2–4 trillion USD until 2050 [ 2 ]. At the same time, the severe impacts of climate change require investments for adaptation. Accordingly, inducing climate finance flows ranks highly on the climate policy agenda. A growing community of public policy scholars aims to provide evidence-based advice for policymaking with respect to climate finance. Important insights have been gained (e.g., the collection of research and practitioners’ experiences in [ 3 ]), although we believe that many aspects are still severely understudied.

The international policy discourse considers climate finance from two related but distinct perspectives. First, since 1997 when the Kyoto Protocol enabled developing countries to generate revenues from the sale of emission credits through the Clean Development Mechanism (CDM), policies that mobilize climate-related monetary transfers from developed to developing countries have been deemed necessary. After all, many developing countries have contributed very little to climate change but are heavily affected by its consequences. Finance has been very prominent in UNFCCC negotiations since 2009, when the concept of public international climate finance was enshrined in the Copenhagen Accord’s goal of mobilizing 100 billion USD by 2020. This goal subsequently led to the creation of the Green Climate Fund. The Paris Agreement addresses this through Article 9 (provision of financial resources) and in Article 6 (voluntary collaboration through international carbon markets and non-market approaches). Second, and more recently, awareness is increasing that policy interventions are required to re-direct finance flows from high-carbon to low-carbon assets worldwide. In this sense, climate finance has received much attention within the financial sector since the negotiation process for the Paris Agreement [ 4 ], and it resulted in the Agreement’s Article 2.1c explicitly calling for the re-direction of finance flows.

Both perspectives on climate finance policies have been taken by extant research. Building on the insights gained thus far, we believe that future work can help policymakers by (ex-ante) developing new policy designs to induce climate finance flows on the international and national levels, and by (ex-post) measuring the effectiveness of policy interventions more rigorously.

Concerning climate finance in the sense of international monetary transfers (PA Art. 9), as discussed in [ 3 ], accounting remains heavily contested, with many observers stating that only a fraction of the 100 billion USD target has actually been achieved. Additionally, adaptation finance has lagged behind mitigation finance, probably due to the absence of universally agreed-upon metrics. Allocation seems to be linked not only to the actual needs of vulnerable groups but also to the interests of donors. While some bilateral funding programs, such as Germany’s IKI, have performed well, multilateral development banks and dedicated climate funds have been criticized for cumbersome procedures and inconsistent monitoring approaches. A more ‘polycentric’ approach involving actors with legitimate stakes in ownership and accountability of funding beyond contributor and recipient governments could resolve some of these challenges. However, the appetite of voters and policymakers to underwrite significant transfers abroad may be limited [ 5 ]. The negotiations on the goal of international climate finance after 2025 will illustrate this clearly. Critical topics needing more research include policy designs for the blending of climate finance and international carbon markets [ 6 ], the evaluation of the effectiveness of interventions, particularly regarding adaptation finance [ 7 ], and resulting institutional learning of funding agencies and the political economy of climate finance allocation .

Concerning climate finance in the sense of re-directing finance flows (PA Art. 2.1c), policy output has high momentum, particularly in OECD countries, with the aim of making low-carbon assets more attractive for financiers than high-carbon assets [ 4 ]. While such policies are being enacted at a fast pace, substantial research is needed on how best to design them. Past work has led to a solid understanding of what works to mobilize finance for new low-carbon assets , such as renewables; for example, policy designs that simultaneously address return and risk characteristics [ 8 ] and direct market activity from Green State Investment Banks [ 9 ]. The literature has also studied potential drivers to reduce the cost of capital for clean energy technologies [ 10 ]. Much less is known about how to effectively discourage investment in high-carbon assets , an imbalance that future research should address. Recent work scrutinized drivers for fossil fuel divestment decisions [ 11 ] and other mechanisms for investor impacts on the climate [ 12 ], but the role of climate finance policies in discouraging high-carbon investment remains largely elusive.

While some assets are clearly climate friendly (e.g., renewables) or unfriendly (e.g., new coal power plants), there are many technologies and business models “in between.” Here, governments can leverage their information nodality by defining taxonomies and labels [ 4 ]. The European Union (EU) is a frontrunner in this regard, and researchers have put great effort into defining a science-based foundation for the EU Green Taxonomy (e.g., via the Platform for Sustainable Finance [ 13 ]). Unfortunately, recent key aspects of the taxonomy have been softened in the political process; we need a better understanding of the underlying politics that influence climate finance regulations in the EU and beyond, which is another area for future research.

Abstracting from specific technologies, other policy interventions attempt to improve companies’ climate-related financial disclosures in general [ 4 ]. The underlying idea that increased transparency on climate impacts will lead to a re-allocation of investments is contested [ 14 ], and, indeed, we lack evidence as to what extent such information mandates are actually effective. Finally, the economic literature increasingly considers the role of central banks in climate finance, and research on “green” monetary policy designs is gaining traction [ 15 ].

In sum, it is encouraging to see the momentum in climate finance policymaking–although policy activity alone is not a guarantee for actual progress in mitigation and adaptation. Policies need to be well designed and continuously evaluated for their effectiveness. Following the agenda described in this piece, climate policy scholars can contribute to this important endeavor.

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• 3. Michaelowa A, Sacherer A-K. Handbook of International Climate Finance. Edward Elgar Publishing; 2022.

Sustainable Digital Finance and the Pursuit of Environmental Sustainability

• First Online: 19 May 2024

Cite this chapter

• Marco Dell’Erba 7 , 8  

Part of the book series: EBI Studies in Banking and Capital Markets Law ((ESBCML))

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In recent years technology and sustainability emerged as two main drivers for economy and finance, each with its own characteristics and following independent paths of development. The general discourse on the relationship between technology (more recently financial technology-fintech) and sustainability tended to emphasize the role of technology as a tool for pursuing sustainability mostly from the perspective of financial inclusion. Therefore the relationship with environmental sustainability was less often considered. This chapter tries to answer the question on the role of digital finance as a tool for pursuing environmental sustainability, and the way specific policies might contribute to pursuing this goal. Adopting this perspective, this chapter considers the emergence of sustainable digital finance as the clearest result of the interplay between technology and sustainability, assessing its potential for contributing to environmental sustainability. In doing this, this chapter considers the most relevant public initiatives at the international level and provides a brief overview of the technologies involved in sustainable digital finance, assessing their own specificities and complementarity. Finally, this chapter makes some critical considerations and proposes some policy suggestions to strengthen sustainable digital finance in a view of achieving ambitious societal goals.

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UN Sustainable Development Group, People’s Money: Harnessing Digitalization to Finance a Sustainable Future , (August 2020), https://unsdg.un.org/resources/peoples-money-harnessing-digitalization-finance-sustainable-future .

UN Sustainable Development Group, People’s Money.

See generally Nathan Cortez, “Regulating Disruptive Innovation”, Berkeley Technology Law Journal 29, no. 1 (Spring 2014): 175–228.

“Digital Finance Package”, Communication, European Commission, published September 24, 2020, https://ec.europa.eu/info/publications/200924-digital-finance-proposals_en ; “Digital finance Package: Commission sets out new, ambitious approach to encourage responsible innovation to benefit consumers and businesses”, Digital finance Package, European Commission, published September 24, 2020, https://ec.europa.eu/commission/presscorner/detail/en/IP_20_1684 .

Business Roundtable, Statement on the Purpose of a Corporation , (August 19, 2019), https://s3.amazonaws.com/brt.org/BRT-StatementonthePurposeofaCorporationOctober2020.pdf .

Larry Fink, “A fundamental Reshape of Finance”, accessed January 14, 2020, https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter .

See Edward B. Rock, “For Whom Is the Corporation Managed in 2020?: The Debate over Corporate Purpose” (European Corporate governance Institute—Law Working Paper No. 515/2020, New York University School of Law, Law and Economics Research Paper Series Working Paper No. 20–16, New York, May 1, 2020), https://ssrn.com/abstract=3589951 ; see also Jill E. Fisch and Steven Davidoff Solomon, “Should Corporations have a Purpose?” (European Corporate governance Institute—Law Working Paper No. 510/2020, University of Pennsylvania Law School, Institute for Law and Economics, Research Paper No. 20–22, Pennsylvania, August 3, 2020), https://ssrn.com/abstract=3561164 ; and see also Lucian A. Bebchuk and Roberto Tallarita, “The Illusory Promise of Stakeholder Governance”, Cornell Law Review (Forthcoming, December 2020), https://ssrn.com/abstract=3544978 .

UN General Assembly, Resolution 70/1, Transforming our world: the 2030 Agenda for Sustainable Development, A/RES/70/1 (September 25, 2015), https://sustainabledevelopment.un.org/post2015/transformingourworld .

“Renewed Sustainable Finance Strategy and Implementation of the Action Plan on Financing Sustainable Growth”, European Commission, last updated August 5, 2020, https://ec.europa.eu/info/publications/sustainable-finance-renewed-strategy_en ; “Overview of Sustainable Finance”, European Commission, accessed December 8, 2020, https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/overview-sustainable-finance_en#action-plan .

“What Is Sustainable Finance”, Overview of sustainable finance, European Commission, accessed December 1, 2020, https://finance.ec.europa.eu/sustainable-finance/overview-sustainable-finance_en .

G20, Green finance Synthesis Report , July 15, 2016, http://www.g20.utoronto.ca/2016/green-finance-synthesis.pdf .

DBS and Sustainable Digital Finance Alliance, Sustainable Digital finance in Asia: Creating Environmental Impact Through Bank Transformation , https://greendigitalfinancealliance.org/wp-content/uploads/2019/11/SustainableDigitalFinanceinAsia.pdf .

UN Environment Inquiry, Green Digital Finance: Mapping Current Practice and Potential in Switzerland and Beyond , September 2018, https://www.greengrowthknowledge.org/sites/default/files/downloads/resource/Green_Digital_Finance_Mapping_in_Switzerland_and_Beyond.pdf .

DBS and Sustainable Digital Finance Alliance, Sustainable Digital finance.

UN Environment, accessed December 1, 2020, https://www.unep.org/news-and-stories/press-release/revolutionary-digital-platform-boost-green-finance .

“About GDFA”, Green Digital Finance Alliance, accessed December 1, 2020, https://greendigitalfinancealliance.org/about-gdfa2/ .

Green Digital Finance Alliance, “About GDFA.”.

“Inquiry into the Design of a Sustainable Financial System”, UNEP Finance Initiative, published January 22, 2014, https://www.unepfi.org/news/inquiry-into-the-design-of-a-sustainable-financial-system/ .

G20 Sustainable Finance Study Group, Synthesis Report , July 2018, https://unepinquiry.org/wp-content/uploads/2018/11/G20_Sustainable_Finance_Synthesis_Report_2018.pdf .

G20 Sustainable Finance Working Group, “2022 G20 Sustainable Finance Report”, Recommendation 19, https://g20sfwg.org/wp-content/uploads/2022/10/2022-G20-Sustainable-Finance-Report-2.pdf . Recommendation 19 requires to “[d]eploy digital technologies to reduce the costs of sustainable finance operations. Digital technologies have the potential to increase the efficiency and reduce the costs of sustainable finance operations. MDBs, technical assistance providers, and relevant international organizations and networks should devote more resources in assisting and providing capacity building for developing countries to adopt and deploy such technologies. Examples of use cases of digital technologies include identification and labelling of sustainable activities and assets, tracking and disclosure of granular ESG information, trading and management of sustainable assets.”.

UN Environment Inquiry,  Green Digital Finance .

UN Environment Inquiry, Green Digital Finance .

“About”, Green Asset Wallets, December 1, 2020, https://greenassetswallet.org/about .

See Sylvie Lemmet and Pierre Ducret, Executive Summary French Strategy for Green Finance, December 2017, https://2017.climatefinanceday.com/wp-content/uploads/2017/12/EXECUTIVE-SUMMARY-finance-verte-sircom-v3.pdf .

“SIF launches Green Fintech Network”, State Secretariat for International Finance, last modified November 5, 2020, https://www.sif.admin.ch/sif/en/home/dokumentation/fokus/fintech-network.html .

European Commission, Consultation on the Renewed Sustainable Finance Strategy , April 8, 2020, https://finance.ec.europa.eu/system/files/2020-04/2020-sustainable-finance-strategy-consultation-document_en.pdf .

Please note that at time of writing the results of the consultation are not available yet.

European Commission, Consultation , 23.

Ross P. Buckley et al., “Sustainability, Fintech and Financial Inclusion” (European Banking Institute Working Paper Series 2019/41, University of Luxembourg Law Working Paper No. 006–2019, UNSW Law Research Paper No. 19–63, University of Hong Kong Faculty of Law Research Paper No. 2019/038, European Business and Organization Law Review, Nov. 1, 2019, Forthcoming), https://ssrn.com/abstract=3387359 .

Buckley et al., “Sustainability, Fintech and Financial Inclusion”.

UN Environment Inquiry, Green Digital Finance.

“Big Data: What It Is and Why It Matters”, SAS, accessed December 1, 2020, https://www.sas.com/en_us/insights/big-data/what-is-big-data.html .

“Machine Learning: What It Is and Why It Matters”, SAS, accessed December 1, 2020, https://www.sas.com/en_us/insights/analytics/machine-learning.html ; see also “Artificial intelligence: What It Is and Why It Matters”, SAS, accessed December 1, 2020, https://www.sas.com/en_us/insights/analytics/what-is-artificial-intelligence.html .

“What Is Mobile Technology?”, Mobile Technology, IBM, accessed December 1, 2020, https://www.ibm.com/topics/mobile-technology .

On the relationship between crowdfunding and green finance, see Simon Dikau et al., “Enhancing Digital Sustainable Finance: Digital Solutions To Mobilise Capital, Assess Environmental Risks And Enhance Financial Inclusion”, G20 Insights, accessed December 11, 2022, https://www.global-solutions-initiative.org/policy_brief/enhancing-digital-sustainable-finance-digital-solutions-to-mobilise-capital-assess-environmental-risks-and-enhance-financial-inclusion/ .

Jen Clark, “What Is the Internet of Things (IoT)?”, Internet of Things (blog), IBM , November 17, 2016, https://www.ibm.com/blogs/internet-of-things/what-is-the-iot/ .

DBS and Sustainable Digital Finance Alliance, Sustainable Digital Finance.

G20 Sustainable Finance Study Group, Synthesis Report.

BIS, “Project Genesis 1.0: Prototype Digital Platforms for Green Bond Tokenization”, November 15, 2022, https://www.bis.org/about/bisih/topics/green_finance/green_bonds.htm .

BIS, Project Genesis 1.0: Protopy Digital Platforms for Green Bond tokenization.

EBF, Towards a Green finance Framework , https://www.ebf.eu/wp-content/uploads/2017/09/Geen-finance-complete.pdf .

EBF, Towards a Green Finance Framework.

See generally Marco Dell’Erba, “Initial Coin Offerings: The Response of Regulatory Authorities”, New York University Journal of Law & Business 14, no. 3 (Summer 2018): 1107–1136.

See generally Marco Dell’Erba, “From Inactivity to Full Enforcement: The Implementation of the ‘Do No Harm’ Approach in Initial Coin Offerings”, Michigan Technology Law Review 26, no. 2 (Spring 2020): 175–227.

See generally Marco Dell’Erba, “Stablecoins in Cryptoeconomics from Initial Coin Offerings to Central Bank Digital Currencies”, New York University Journal of Legislation and Public Policy 22, no. 1 (2019): 1–47; see also Marco Dell’Erba, “Shadow Central Banking”, November 6, 2019 (unpublished manuscript), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3488040 .

Dell’Erba, supra Footnote 60.

G20 Sustainable Finance Study Group, Synthesis Report .

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Dell’Erba, M. (2024). Sustainable Digital Finance and the Pursuit of Environmental Sustainability. In: Busch, D., Ferrarini, G., Grünewald, S. (eds) Sustainable Finance in Europe. EBI Studies in Banking and Capital Markets Law. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-53696-0_3

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Doctor in Philosophy (DPhil/PhD) in Sustainable Finance topics

Course overview

Each year the Oxford Sustainable Finance Programme supervises or co-supervises Doctor of Philosophy (DPhil/PhD) students on sustainable finance topics.

Students apply to the DPhil in Geography and the Environment at the University of Oxford. The DPhil is the University of Oxford’s premier research degree, awarded to candidates who have successfully completed a major piece of original research. The course provides support and an intellectual environment to pursue your own independent research.

Course structure and content

The DPhil is offered as either a full-time three- to four-year degree, or a part-time six- to eight-year degree. Currently the expected contact time for the part-time arrangement is thirty days at Oxford per year; the majority of this will take place across the three eight-week terms and will include supervision meetings and core research training.

Teaching and assessment

The DPhil is an advanced research degree which is awarded on the basis of a thesis and oral examination (assessment of other work is not taken into consideration). The thesis should represent a significant and substantial piece of research which is conveyed in a lucid and scholarly manner which shows that you have a good general knowledge of the field of your thesis. You are required to work independently, to take the initiative in exploring a line of research and to acquire new skills in order to carry out your research. You will be allocated a supervisor who will meet with you at specifically agreed times and will agree with you a research plan and programme of work and to establish clear academic expectations and milestones.

Entry requirements, fees and application

Degree-level qualifications

As a minimum, applicants should hold or be predicted to achieve the equivalent of the following UK qualifications:

• a master’s degree with distinction (or a distinction grade on the dissertation, as a minimum) in geography or a related environmental field,  and
• a first-class or strong upper second-class undergraduate degree with honours in any discipline.

For applicants with a degree from the USA, the minimum GPA sought is 3.7 out of 4.0.

You are encouraged to look at the department lists of  potential supervisors and topics  before writing your research proposal and to approach specific supervisors directly to discuss your research proposal before applying.

Career opportunities

Many graduates are commanding influential positions in multinational corporations, in national, state and international government, in non-governmental organisations, and by continuing with further research.

For course related inquiries please contact:

• [email protected]

Course Features

• Host Institution University of Oxford
• Department / Institute School of Geography and the Environment
• Course Name Doctor in Philosophy (DPhil/PhD) in Sustainable Finance topics
• Course Type Degree program
• Course Mode Full time or part time
• Location Oxford
• Course Language English
• Course Level Doctoral
• Duration 3 years
• For information on course fees please see university website.

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Research Topics & Ideas: Finance

120+ Finance Research Topic Ideas To Fast-Track Your Project

If you’re just starting out exploring potential research topics for your finance-related dissertation, thesis or research project, you’ve come to the right place. In this post, we’ll help kickstart your research topic ideation process by providing a hearty list of finance-centric research topics and ideas.

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We know it’s exciting to run through a list of research topics, but please keep in mind that this list is just a starting point . To develop a suitable education-related research topic, you’ll need to identify a clear and convincing research gap , and a viable plan of action to fill that gap.

If this sounds foreign to you, check out our free research topic webinar that explores how to find and refine a high-quality research topic, from scratch. Alternatively, if you’d like hands-on help, consider our 1-on-1 coaching service .

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Corporate Finance

These research topic ideas explore a breadth of issues ranging from the examination of capital structure to the exploration of financial strategies in mergers and acquisitions.

• Evaluating the impact of capital structure on firm performance across different industries
• Assessing the effectiveness of financial management practices in emerging markets
• A comparative analysis of the cost of capital and financial structure in multinational corporations across different regulatory environments
• Examining how integrating sustainability and CSR initiatives affect a corporation’s financial performance and brand reputation
• Analysing how rigorous financial analysis informs strategic decisions and contributes to corporate growth
• Examining the relationship between corporate governance structures and financial performance
• A comparative analysis of financing strategies among mergers and acquisitions
• Evaluating the importance of financial transparency and its impact on investor relations and trust
• Investigating the role of financial flexibility in strategic investment decisions during economic downturns
• Investigating how different dividend policies affect shareholder value and the firm’s financial performance

Investment Banking

The list below presents a series of research topics exploring the multifaceted dimensions of investment banking, with a particular focus on its evolution following the 2008 financial crisis.

• Analysing the evolution and impact of regulatory frameworks in investment banking post-2008 financial crisis
• Investigating the challenges and opportunities associated with cross-border M&As facilitated by investment banks.
• Evaluating the role of investment banks in facilitating mergers and acquisitions in emerging markets
• Analysing the transformation brought about by digital technologies in the delivery of investment banking services and its effects on efficiency and client satisfaction.
• Evaluating the role of investment banks in promoting sustainable finance and the integration of Environmental, Social, and Governance (ESG) criteria in investment decisions.
• Assessing the impact of technology on the efficiency and effectiveness of investment banking services
• Examining the effectiveness of investment banks in pricing and marketing IPOs, and the subsequent performance of these IPOs in the stock market.
• A comparative analysis of different risk management strategies employed by investment banks
• Examining the relationship between investment banking fees and corporate performance
• A comparative analysis of competitive strategies employed by leading investment banks and their impact on market share and profitability

Private Equity & Venture Capital (VC)

These research topic ideas are centred on venture capital and private equity investments, with a focus on their impact on technological startups, emerging technologies, and broader economic ecosystems.

• Investigating the determinants of successful venture capital investments in tech startups
• Analysing the trends and outcomes of venture capital funding in emerging technologies such as artificial intelligence, blockchain, or clean energy
• Assessing the performance and return on investment of different exit strategies employed by venture capital firms
• Assessing the impact of private equity investments on the financial performance of SMEs
• Analysing the role of venture capital in fostering innovation and entrepreneurship
• Evaluating the exit strategies of private equity firms: A comparative analysis
• Exploring the ethical considerations in private equity and venture capital financing
• Investigating how private equity ownership influences operational efficiency and overall business performance
• Evaluating the effectiveness of corporate governance structures in companies backed by private equity investments
• Examining how the regulatory environment in different regions affects the operations, investments and performance of private equity and venture capital firms

Asset Management

This list includes a range of research topic ideas focused on asset management, probing into the effectiveness of various strategies, the integration of technology, and the alignment with ethical principles among other key dimensions.

• Analysing the effectiveness of different asset allocation strategies in diverse economic environments
• Analysing the methodologies and effectiveness of performance attribution in asset management firms
• Assessing the impact of environmental, social, and governance (ESG) criteria on fund performance
• Examining the role of robo-advisors in modern asset management
• Evaluating how advancements in technology are reshaping portfolio management strategies within asset management firms
• Evaluating the performance persistence of mutual funds and hedge funds
• Investigating the long-term performance of portfolios managed with ethical or socially responsible investing principles
• Investigating the behavioural biases in individual and institutional investment decisions
• Examining the asset allocation strategies employed by pension funds and their impact on long-term fund performance
• Assessing the operational efficiency of asset management firms and its correlation with fund performance

Hedge Funds

Here we explore research topics related to hedge fund operations and strategies, including their implications on corporate governance, financial market stability, and regulatory compliance among other critical facets.

• Assessing the impact of hedge fund activism on corporate governance and financial performance
• Analysing the effectiveness and implications of market-neutral strategies employed by hedge funds
• Investigating how different fee structures impact the performance and investor attraction to hedge funds
• Evaluating the contribution of hedge funds to financial market liquidity and the implications for market stability
• Analysing the risk-return profile of hedge fund strategies during financial crises
• Evaluating the influence of regulatory changes on hedge fund operations and performance
• Examining the level of transparency and disclosure practices in the hedge fund industry and its impact on investor trust and regulatory compliance
• Assessing the contribution of hedge funds to systemic risk in financial markets, and the effectiveness of regulatory measures in mitigating such risks
• Examining the role of hedge funds in financial market stability
• Investigating the determinants of hedge fund success: A comparative analysis

Financial Planning and Advisory

This list explores various research topic ideas related to financial planning, focusing on the effects of financial literacy, the adoption of digital tools, taxation policies, and the role of financial advisors.

• Evaluating the impact of financial literacy on individual financial planning effectiveness
• Analysing how different taxation policies influence financial planning strategies among individuals and businesses
• Evaluating the effectiveness and user adoption of digital tools in modern financial planning practices
• Investigating the adequacy of long-term financial planning strategies in ensuring retirement security
• Assessing the role of financial education in shaping financial planning behaviour among different demographic groups
• Examining the impact of psychological biases on financial planning and decision-making, and strategies to mitigate these biases
• Assessing the behavioural factors influencing financial planning decisions
• Examining the role of financial advisors in managing retirement savings
• A comparative analysis of traditional versus robo-advisory in financial planning
• Investigating the ethics of financial advisory practices

The following list delves into research topics within the insurance sector, touching on the technological transformations, regulatory shifts, and evolving consumer behaviours among other pivotal aspects.

• Analysing the impact of technology adoption on insurance pricing and risk management
• Analysing the influence of Insurtech innovations on the competitive dynamics and consumer choices in insurance markets
• Investigating the factors affecting consumer behaviour in insurance product selection and the role of digital channels in influencing decisions
• Assessing the effect of regulatory changes on insurance product offerings
• Examining the determinants of insurance penetration in emerging markets
• Evaluating the operational efficiency of claims management processes in insurance companies and its impact on customer satisfaction
• Examining the evolution and effectiveness of risk assessment models used in insurance underwriting and their impact on pricing and coverage
• Evaluating the role of insurance in financial stability and economic development
• Investigating the impact of climate change on insurance models and products
• Exploring the challenges and opportunities in underwriting cyber insurance in the face of evolving cyber threats and regulations

Quantitative Finance

These topic ideas span the development of asset pricing models, evaluation of machine learning algorithms, and the exploration of ethical implications among other pivotal areas.

• Developing and testing new quantitative models for asset pricing
• Analysing the effectiveness and limitations of machine learning algorithms in predicting financial market movements
• Assessing the effectiveness of various risk management techniques in quantitative finance
• Evaluating the advancements in portfolio optimisation techniques and their impact on risk-adjusted returns
• Evaluating the impact of high-frequency trading on market efficiency and stability
• Investigating the influence of algorithmic trading strategies on market efficiency and liquidity
• Examining the risk parity approach in asset allocation and its effectiveness in different market conditions
• Examining the application of machine learning and artificial intelligence in quantitative financial analysis
• Investigating the ethical implications of quantitative financial innovations
• Assessing the profitability and market impact of statistical arbitrage strategies considering different market microstructures

Treasury Management

The following topic ideas explore treasury management, focusing on modernisation through technological advancements, the impact on firm liquidity, and the intertwined relationship with corporate governance among other crucial areas.

• Analysing the impact of treasury management practices on firm liquidity and profitability
• Analysing the role of automation in enhancing operational efficiency and strategic decision-making in treasury management
• Evaluating the effectiveness of various cash management strategies in multinational corporations
• Investigating the potential of blockchain technology in streamlining treasury operations and enhancing transparency
• Examining the role of treasury management in mitigating financial risks
• Evaluating the accuracy and effectiveness of various cash flow forecasting techniques employed in treasury management
• Assessing the impact of technological advancements on treasury management operations
• Examining the effectiveness of different foreign exchange risk management strategies employed by treasury managers in multinational corporations
• Assessing the impact of regulatory compliance requirements on the operational and strategic aspects of treasury management
• Investigating the relationship between treasury management and corporate governance

Financial Technology (FinTech)

The following research topic ideas explore the transformative potential of blockchain, the rise of open banking, and the burgeoning landscape of peer-to-peer lending among other focal areas.

• Evaluating the impact of blockchain technology on financial services
• Investigating the implications of open banking on consumer data privacy and financial services competition
• Assessing the role of FinTech in financial inclusion in emerging markets
• Analysing the role of peer-to-peer lending platforms in promoting financial inclusion and their impact on traditional banking systems
• Examining the cybersecurity challenges faced by FinTech firms and the regulatory measures to ensure data protection and financial stability
• Examining the regulatory challenges and opportunities in the FinTech ecosystem
• Assessing the impact of artificial intelligence on the delivery of financial services, customer experience, and operational efficiency within FinTech firms
• Analysing the adoption and impact of cryptocurrencies on traditional financial systems
• Investigating the determinants of success for FinTech startups

Commercial Banking

These topic ideas span commercial banking, encompassing digital transformation, support for small and medium-sized enterprises (SMEs), and the evolving regulatory and competitive landscape among other key themes.

• Assessing the impact of digital transformation on commercial banking services and competitiveness
• Analysing the impact of digital transformation on customer experience and operational efficiency in commercial banking
• Evaluating the role of commercial banks in supporting small and medium-sized enterprises (SMEs)
• Investigating the effectiveness of credit risk management practices and their impact on bank profitability and financial stability
• Examining the relationship between commercial banking practices and financial stability
• Evaluating the implications of open banking frameworks on the competitive landscape and service innovation in commercial banking
• Assessing how regulatory changes affect lending practices and risk appetite of commercial banks
• Examining how commercial banks are adapting their strategies in response to competition from FinTech firms and changing consumer preferences
• Analysing the impact of regulatory compliance on commercial banking operations
• Investigating the determinants of customer satisfaction and loyalty in commercial banking

International Finance

The folowing research topic ideas are centred around international finance and global economic dynamics, delving into aspects like exchange rate fluctuations, international financial regulations, and the role of international financial institutions among other pivotal areas.

• Analysing the determinants of exchange rate fluctuations and their impact on international trade
• Analysing the influence of global trade agreements on international financial flows and foreign direct investments
• Evaluating the effectiveness of international portfolio diversification strategies in mitigating risks and enhancing returns
• Evaluating the role of international financial institutions in global financial stability
• Investigating the role and implications of offshore financial centres on international financial stability and regulatory harmonisation
• Examining the impact of global financial crises on emerging market economies
• Examining the challenges and regulatory frameworks associated with cross-border banking operations
• Assessing the effectiveness of international financial regulations
• Investigating the challenges and opportunities of cross-border mergers and acquisitions

Choosing A Research Topic

These finance-related research topic ideas are starting points to guide your thinking. They are intentionally very broad and open-ended. By engaging with the currently literature in your field of interest, you’ll be able to narrow down your focus to a specific research gap .

When choosing a topic , you’ll need to take into account its originality, relevance, feasibility, and the resources you have at your disposal. Make sure to align your interest and expertise in the subject with your university program’s specific requirements. Always consult your academic advisor to ensure that your chosen topic not only meets the academic criteria but also provides a valuable contribution to the field. 

If you need a helping hand, feel free to check out our private coaching service here.

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Investors pull cash from ESG funds as performance lags

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Global investors are turning their backs on sustainability-focused stock funds, as poor performance, scandals and attacks from US Republicans hit enthusiasm for a much-hyped sector that has pulled in trillions of dollars of assets.

Clients have withdrawn a net $40bn from environmental, social and governance (ESG) equity funds this year, according to research from Barclays, the first year that flows have trended negative. Redemptions, which include a record monthly net outflow of about $14bn in April, have been widespread across all main regions.

The outflows mark a significant reversal for a sector that investors have flocked to in recent years, attracted by the claim that such funds could help change the world for the better while also making as much — or even more — money as traditional stock portfolios.

Pierre-Yves Gauthier, head of strategy and co-founder at AlphaValue, a Paris-based independent research company, compared the sector to the tech bubble that burst in 2000. “ESG was a dotcom sort of hype 20 years later and now it has passed,” he said.

Many funds have been hit by the poor performance of sectors such as clean energy, while they have also missed out on strong returns from fossil fuel companies that they actively avoided.

Scandals such as one at German asset manager DWS — which agreed to pay $19mn to the US securities regulator in a greenwashing probe after being accused of making “materially misleading statements” — have also hit appetite for the sector.

Congressional Republicans have attacked ESG investing as “radical partisan activism masquerading as responsible corporate governance”. The Republican-controlled House of Representatives has subpoenaed BlackRock and rival State Street as part of an investigation into the sector, which they say may violate antitrust laws.

BlackRock’s Larry Fink last year said he did not use the term ESG anymore “because it’s been entirely weaponised ”.

Amid the backlash, US investors pulled $4.4bn from ESG equity funds in April, according to the Barclays research, which is based on data from fund tracker EPFR.

Assets in BlackRock’s largest US ESG fund have halved from $25bn at the peak in late 2021 to $12.8bn in May. Last year, the company dropped the ESG fund from its popular “60/40” model portfolio of stocks and bonds.

The largest US sustainable fund, Parnassus Core Equity, which has $28.4bn of assets, “has been one of the 10 biggest losers in terms of flows for two years straight”, Morningstar said in a report in May.

“US ESG flows are negative, and it is probably a testimony to what is happening in the context of the US with a very polarised and politicised debate around it which has frozen the behaviour on that front,” said Elodie Laugel, chief responsible investment officer at Amundi, which is the second-largest sustainable fund manager globally after BlackRock.

But the most recent data highlights that the pullback from ESG has reached Europe, the strategy’s traditional stronghold. ESG equity fund outflows in the region were $1.9bn in April.

Global investors’ appetite for ESG peaked at the end of 2021, just before Russia invaded Ukraine, leading to a surge in gas prices and fossil fuel stocks. Sharp interest rate rises by central banks in 2022 to combat inflation, meanwhile, punished high-growth technology companies, which are typically favoured by ESG funds over oil and gas businesses.

Over the past 12 months, global sustainable equity funds made an 11 per cent return, compared with 21 per cent for conventional stock funds, according to a May report from JPMorgan.

“Clearly, the fact that performance has not been good for these funds over the past two years . . . has discouraged some investors,” said Hortense Bioy, global director of sustainability research at Morningstar.

Suggesting that some ESG products might have failed to live up to their promise, Jamie Franco, global head of sustainable investments at asset manager TCW, said some funds launched in 2020-21 “probably went out a little too quickly [and] probably took advantage of some ESG marketing sentiment”.

But she added some investors continued to pursue ESG goals in separately managed accounts that were not necessarily captured by fund flow figures.

While withdrawals have hammered ESG equity funds, ESG bond funds have had 13 straight months of inflows through to April, according to Barclays. ESG bond funds have raked in $22bn this year.

Todd Cort, a professor at the Yale School of Management who specialises in sustainable investing, said that although the ESG label might increasingly fall out of use, underlying social and environmental challenges would remain.

“Behind the curtain, there will be substantially more effort by investors to understand environmental and social risks,” he said. “That will continue to grow, and I actually don’t care too much if we continue to call it ESG.”

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