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Past, present, and future of sustainable finance: insights from big data analytics through machine learning of scholarly research

• Original Research
• Published: 04 January 2022

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• Satish Kumar 1 , 2 ,
• Dipasha Sharma 3 ,
• Sandeep Rao 4 ,
• Weng Marc Lim 2 , 5 &
• Sachin Kumar Mangla   ORCID: orcid.org/0000-0001-7166-5315 6  

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A Correction to this article was published on 10 February 2022

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Sustainable finance is a rich field of research. Yet, existing reviews remain limited due to the piecemeal insights offered through a sub-set rather than the entire corpus of sustainable finance. To address this gap, this study aims to conduct a large-scale review that would provide a state-of-the-art overview of the performance and intellectual structure of sustainable finance. To do so, this study engages in a review of sustainable finance research using big data analytics through machine learning of scholarly research. In doing so, this study unpacks the most influential articles and top contributing journals, authors, institutions, and countries, as well as the methodological choices and research contexts for sustainable finance research. In addition, this study reveals insights into seven major themes of sustainable finance research, namely socially responsible investing, climate financing, green financing, impact investing, carbon financing, energy financing, and governance of sustainable financing and investing. To drive the field forward, this study proposes several suggestions for future sustainable finance research, which include developing and diffusing innovative sustainable financing instruments, magnifying and managing the profitability and returns of sustainable financing, making sustainable finance more sustainable, devising and unifying policies and frameworks for sustainable finance, tackling greenwashing of corporate sustainability reporting in sustainable finance, shining behavioral finance on sustainable finance, and leveraging the power of new-age technologies such as artificial intelligence, blockchain, internet of things, and machine learning for sustainable finance.

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1 Introduction

As a universal call to action to end poverty, protect the planet, and improve the lives and prospects of everyone around the world, the 17 Sustainable Development Goals (SDGs) are a part of the 2030 Agenda for Sustainable Development that have been adopted by all United Nations Member States in 2015 and expected to be achieved by 2030 (United Nations, 2020 ). The United Nations estimates an investment in the range of $5 trillion to $7 trillion to achieve the SDGs (Craig, 2021 ). With the unprecedent outbreak of a global pandemic in 2020, the United Nations Development Programme (UNDP) launched the SDG Finance Taxonomy to provide a roadmap for manage the financing and transaction costs of projects that are aligned to the SDGs (Wang et al., 2020 ). The taxonomy also calls for private capital, finance instruments, and support from financial institutions to contribute toward achieving the SDGs. SDG 17, which is about partnership for goals, is earmarked as a lynchpin for meeting the finance needs required for activities dedicated to achieving the SDGs (MacDonald et al., 2019 ; Rizzello & Kabli, 2020 ).

Sustainable finance has emerged as an important concept at the intersection of finance and the SDGs. More than $400 billion of new funds have been raised on capital markets in 2020, which includes $357.5 billion from sustainability bonds and $76.5 billion from green bonds (Refinitiv, 2020 ; United Nations, 2020 ). The definition of sustainable finance, however, is very broad, encompassing myriad dimensions of sustainable ways to attain finance and investment goals. The European Commission ( 2021 ) defines sustainable finance as an evolving process of considering environmental, social, and governance (ESG) factors in financial and investment decisions. However, this definition, which is limited to ESG factors, is very narrow. This calls for a broader and more encompassing definition that speaks to sustainability at large. In this regard, we propose that sustainable finance should encompass all activities and factors that would make finance sustainable and contribute to sustainability , a definition that we opine complements the myriad goals by different stakeholders, such as the European Commission’s ESG and the United Nations’ SDGs. Indeed, the attainment of sustainable policy objectives across numerous jurisdictions can be achieved through various ways such as climate finance, carbon and ESG disclosure, green bonds, and socially responsible investment (Alsaifi et al., 2020 ; Barua & Chiesa, 2019 ; Lokuwaduge & Heenetigala, 2017 ; Migliorelli, 2021 ; OECD, 2020 ; Widyawati, 2020 ), all of which can be covered under our umbrella definition of sustainable finance.

Considering the broad nature of sustainable finance and its importance for achieving the sustainability agenda, many studies have been undertaken to enhance the understanding and practice of sustainable finance. The recent review of sustainable finance by Cunha et al. ( 2021 ) exemplifies this observation, as the authors found that the extant literature on sustainable finance to be “excessively fragmented”, which makes it difficult to “identify what constitutes the field and what differentiates it from traditional finance”. However, their review, which shed light on the critical features of sustainable finance, the global initiatives for the promotion of sustainable finance, and the strategies and outcomes of the main players in sustainable finance, considered 166 articles only, though the field is in fact very much larger, as we demonstrate through the present review consisting of 936 articles. Noteworthily, no review, to date, has attempted to analyze the burgeoning field of sustainable finance without making excessive concessions, wherein overly stringent criteria are imposed to trim the corpus for review to a manageable size for review, as witness in the review by Cunha et al. ( 2021 ).

In this study, we aim to provide a state-of-the-art overview of sustainable finance research, taking into account all aspects and related articles in the field. That is to say, this study covers the entire spectrum of sustainable finance, and thus, it is not limited to any single aspect of the concept, as in the case of past reviews such as climate finance (Giglio et al., 2020 ) and green finance (Malhotra & Thakur, 2020 ). Moreover, this study uses an objective and a powerful review method, namely bibliometric analysis, which is highly suitable for reviewing fields with a large corpus of articles using quantitative techniques (Donthu et al., 2021a ; Pattnaik et al., 2020 ; Paul et al., 2021 ). Specifically, bibliometric analysis exemplifies the use of big data analytics through machine learning of scholarly research in two major ways, namely

the search for big data (bibliometrics) is carried out on an artificial intelligence-powered scientific database (Scopus), wherein the scientific database uses specified keywords for supervised machine learning , as a subset of artificial intelligence, to extract large amounts of bibliometric data relating to articles relevant to sustainable finance, and

the analysis of big data (bibliometrics), which is multi-faceted (e.g., journal, author, institution, country, keywords), multi-formatted (e.g., numbers, words), and large-scaled (e.g., thousands of data points across the multiple facets of 936 articles), is powered by unsupervised machine learning , as another subset of artificial intelligence, to discover latent relationships (e.g., interrelated keywords) and the equivalent clusters of latent relationships (e.g., major themes).

In this regard, this study significantly extends Cunha et al.’s ( 2021 ) review on sustainable finance to uncover the insights that they were not able to provide due to the inherent limitation of their manual and qualitative review of only a small corpus of the literature. Specifically, this study sheds light on the performance analysis and science mapping of the entire corpus of sustainable finance research using a bibliometric analysis, wherein the former unpacks the publication trend, the top articles and contributing journals, authors, institutions, and countries, and the methodological choices and research contexts, whereas the latter reveals the major themes and topics underpinning the intellectual structure of the field. In doing so, this study will contribute enriching insights that answer six research questions (RQs) that are typically reveal through bibliometric reviews (Donthu et al., 2021b , 2021c ; Kumar et al., 2021a , 2021b , 2021c ; Rao et al., 2021 ), and thus, provide a more accurate representation of the state of sustainable finance research as a whole as opposed to the piecemeal representation that emerges from a sample of the field, as in the case of Cunha et al. ( 2021 ):

RQ1. What is the publication trend for sustainable finance research?

RQ2. Which are the most influential articles and top contributing journals for sustainable finance research?

RQ3. Which are the top contributing authors, institutions, and countries for sustainable finance research?

RQ4. What methodological choices and research contexts exist for sustainable finance research?

RQ5. What are the major themes and topics for sustainable finance research?

RQ6. What are the future research directions for sustainable finance research?

The insights from this review can be used in several useful ways. First, both new and seasoned researchers in sustainable finance can gain an overview and up-to-date understanding of its publication trend to gauge its interest in the scientific community over time (RQ1). Second, prospective authors can identify key literature (articles, journals) (RQ2), potential collaborators (authors, institutions, countries) (RQ3), as well as methodologies and contexts (RQ4) for sustainable finance research through this review. The same applies for policy makers and industry practitioners who wish to identify experts for consultancy, key literature to inform decisions, as well as methodological and contextual guides for applied research. Third, prospective authors can use the major themes and topics revealed through this review as a means to differentiate and position their contributions or novelty against existing streams of sustainable finance research (RQ5). Fourth and finally, prospective authors can gain inspiration from the curation of research directions herein to embark on new and potentially fruitful sustainable finance research (RQ6). These directions can also serve as a teaser into new knowledge that policy makers and industry practitioners can expect to see from the literature in the near future. These contributions, which are typically expected of well-done reviews, are in line with the authoritative guidelines for literature reviews of the field (e.g., Donthu et al., 2021a ) and Paul et al., 2021 ).

The rest of this paper is organized as follows. The paper begins with an overview of sustainable finance. Next, the paper discloses the methodology and reports the findings of the review. Finally, the paper concludes with a future research agenda and a series of research questions for each major theme that can be used as a guide by prospective researchers to advance and fertilize the field of sustainable finance.

2 Sustainable finance

The literature on sustainable finance can be traced back to Ferris and Rykaczewski ( 1986 ), who addressed the concerns and benefits of social investing in portfolio management. Following this seminal article, the next decade of research (1986–1995) expanded the literature on the key success factors of socially responsible investing (Camey, 1994 ; Diltz, 1995 ). New research in the subsequent decade (1996–2005) extended understanding on socially responsible investing in terms of its performance against conventional funds (Guerard & John, 1997 ; Hutton et al., 1998 ; Statman, 2000 ) and the need to expand its scope to account for ethics (Wilson, 1997 ) and the environment (Heinkel et al., 2001 ) such as climate change and renewable energy (Van Der Laan & Lansbury, 2004 ). The later decade (2006–2015) sees the introduction and boom of new research such as carbon finance (Aglietta et al., 2015 ; Bredin et al., 2014 ; Purdon, 2015 ; Yenneti & Gamaralalage, 2012 ; Yeoh, 2008 ), climate finance (Brunner & Enting, 2014 ; Hogarth, 2012 ; Jakob et al., 2015 ; Vanderheiden, 2015 ), conscious capitalism (Sisodia, 2009 , 2013 ; Wang, 2013a , 2013b ), ESG-CSR and firm performance integration (Dorfleitner et al., 2015 ; Eccles & Viviers, 2011 ; Friede et al., 2015 ; Halbritter & Dorfleitner, 2015 ; Himick, 2011 ; Nielsen & Noergaard, 2011 ), and ethical investing (Bauer et al., 2007 ; Belghitar et al., 2014 ; Chow et al., 2014 ; Pender & Brocchetto, 2011 ; Richardson, 2009 ; Säve-Söderbergh, 2010 ; von Wallis & Klein, 2015 ; Watson, 2011 ). The most recent half decade (2015–2020) is characterized by research responding to the Paris agreement and the launch of the SDGs in 2015, with exponential growth in publications focusing on impact investing (Agrawal & Hockerts, 2019 , 2021 ; Caseau & Grolleau, 2020 ; Lieberman, 2020 ; Robb & Sattell, 2016 ; Viviani & Maurel, 2019 ) innovative financial instruments such as social impact bonds (Carè et al., 2020 ; Giacomantonio, 2017 ; Rizzello & Kabli, 2020 ; Torre, et al., 2019 ), and ESG investing and firm performance (Alessandrini & Jondeau, 2020 ; Chen & Mussalli, 2020 ; Giese et al., 2019 ; Landi & Sciarelli, 2019 ; Schramade, 2016 ). The summary of the brief evolution of sustainable finance research is presented in Fig.  1 , and will be investigated further in the later sections of this study.

Evolution of sustainable finance research. CSR Corporate social responsibility. ESG Environmental, social, and governance. SDG Sustainable development goals

Given the burgeoning research on sustainable finance, past researchers have also attempted to review the extant literature in the field. However, in most instances, such reviews were limited to a specific aspect of sustainable finance, and not sustainable finance as a whole. For example, using systematic reviews, researchers have consolidated the extant literature pertaining to climate finance (Giglio et al., 2020 ), ESG (Daugaard, 2020 ; Widyawati, 2020 ), green finance (Malhotra & Thakur, 2020 ; Zhang, et al., 2019 ), impact investing (Clarkin & Cangioni, 2016 ), and socially responsible investing (Camilleri, 2020 ; Fabregat-Aibar et al., 2019 ; Rahman, et al., 2020 ; Revelli & Viviani, 2015 ; Viviers & Eccles, 2012 ), and using bibliometric analysis, researchers such as Bui et al. ( 2020 ) have revealed insights on sustainable corporate finance albeit from a small corpus of 227 articles. Apart from Cunha et al. ( 2021 ), which is the only and most recent review of sustainable finance prior to the present review, no other review has attempted to review the field as a whole. Yet, as mentioned previously, the review by Cunha et al. ( 2021 ) remains limited to a small corpus of 166 articles, and thus, providing a snapshot rather than a state-of-the-art overview of sustainable finance research, wherein the absence and need of the latter to provide a comprehensive stock take of the field motivates the present review, whose methodology will be disclosed in the next section.

3 Methodology

This study collects bibliometric data on sustainable finance research for its review. To do so, this study adopts and implements the Scientific Procedures and Rationales for Systematic Literature Reviews (SPAR-4-SLR) protocol, which consists of three major stages, namely assembling , arranging , and assessing of articles (Paul et al., 2021 ). The summary of the review procedure is illustrated in Fig.  2 .

Systematic review procedure using the SPAR-4-SLR protocol

3.1 Assembling

To assemble the corpus of articles on sustainable finance, this study identified its search keywords relating to sustainable finance from the preliminary review of relevant literature in the previous section and consulted 10 experts to ascertain the suitability of those keywords to represent sustainable finance. This led to a combination of 17 keywords that can be organized into the following search string:

“carbon credit” OR “carbon finance” OR “carbon tax” OR “climate finance” OR “conscious capitalism” OR “ESG investing” OR “green bond” OR “green finance” OR “impact investing” OR “SDG financing” OR “socially responsible investing” OR “sustainability financing” OR “sustainability reporting” OR “sustainability risk disclosure” OR “sustainability risk management” OR “sustainable economy” OR “sustainable finance”

Following the identification of search keywords, this study conducted a search for articles using the aforementioned search string in the “article title, abstract, and keywords” on Scopus, which is the largest high-quality scientific database of scholarly articles (Comerio & Strozzi, 2019 ; Norris & Oppenheim, 2007 ), and thus chosen over its alternative, Web of Science, which contains less articles for review than Scopus (Paul et al., 2021 ). In total, 10,850 documents were returned from the search.

3.2 Arranging

To arrange the corpus of 10,850 articles returned from the assembling stage, this study used the category (code) function in Scopus to review the search results according to year , subject area , document type , publication stage , source type , and language , wherein search results were filtered and limited to “2020”, “business, management, and accounting”, “article”, “final”, “journal”, and “English” in those categories, respectively. These filters were imposed in line with the recommendations of Paul et al. ( 2021 ) because 2020 represented the latest full year run; sustainable finance resides within business, management, and accounting; non-articles such as editorials and notes may not be peer reviewed and the inclusion of reviews can lead to double-barreled insights; in-press articles were discarded as they have not been finalized; non-journal sources such as book, book chapter, and conference proceeding were excluded as they may not have undergone rigorous peer review; and non-English articles were not included on the basis of our limited language proficiency in languages other than English. This led to a reduced corpus consisting of 1,530 articles.

Following that, we downloaded and read each article, and eliminated another 594 articles that mentioned the search keywords sparingly. That is to say, the aspects of sustainable finance did not take center stage in the investigation of those articles, resulting in their removal. This led to a final corpus of 936 articles for review, which was confirmed following a random cross-check using other databases such as Google Scholar and publishers website such as Elsevier, Emerald, Sage, Springer, and Taylor and Francis to avoid unintended exclusion of relevant studies in the field (Goyal et al., 2021 ; Harari et al., 2020 ; Lim et al., 2021 ).

3.3 Assessing

To assess the final corpus of 936 articles on sustainable finance, which is a relatively large corpus, this study adopts a bibliometric analysis approach for its review. In essence, a bibliometric analysis uses quantitative techniques to appraise scientific information of scholarly articles (Donthu et al., 2021a ). Noteworthily, systematic reviews using bibliometrics are now a commonplace (Ellegaard & Wallin, 2015 ), including business in general (Baker et al., 2020 ; Donthu et al., 2021a ; Zupic & Čater, 2015 ) and finance in particular (Durisin & Puzone, 2009 ; Linnenluecke et al., 2018; Xu et al., 2018) as a bibliometric analysis can mitigate the potential bias that avail in manual (e.g., error prone) and qualitative (i.e., subjectivity) reviews using quantitative (i.e., objectivity) tools (Broadus, 1987 ; Burton et al., 2020 ), especially when the corpus for review is large (high hundreds to thousands of articles) (Donthu et al., 2021a ), as in the case of the present review (i.e., 936 articles). Following past reviews (Cobo et al., 2011 ; Donthu et al., 2020 , 2021d ; Khan et al., 2021 ), this study performs a bibliometric analysis using a performance analysis to delinate the publication trend, the top articles and contributing journals, authors, institutions, and countries, and the methodological choices and research contexts, and a science mapping via a temporal analysis using word clouds (Bastian et al., 2009; van Eck & Waltman, 2017 ) and a network analysis using keyword co-occurrence (Callon et al., 1983 ; Castriotta et al., 2019 ; Donthu et al., 2021a ; Newman & Girvan, 2004 ; Pesta et al., 2018 ) in VOSviewer (van Eck & Waltman, 2017 ) to unpack the major themes and topics underpinning the intellectual structure of sustainable finance research. To advance insights in the field, this study curates a future research agenda based on our reading of the articles and reflection of extant gaps under each major theme. The next sections report the findings of the review, wherein narratives are supplemented by figures and tables.

4.1 Performance analysis

Performance analysis is a bibliometric analysis technique that describes the performance of a research domain (Donthu et al., 2021a ), and in this case, the field of sustainable finance. This analysis is akin to that of the profiling of participants in empirical studies albeit in a more rigorous way through the use of bibliometric metrics (Donthu et al., 2021a ). In this study, a performance analysis is conducted to reveal (1) the publication trend, (2) the most influential articles, the top contributing (3) journals, (4) authors, (5) institutions, and (6) countries, and (7) the methodological choices and research contexts of sustainable finance research.

4.1.1 Publication trend for sustainable finance research

The year-wise publication trend of sustainable finance research is presented in Fig.  3 . The figure indicates that the first article on sustainable finance published in a journal indexed in Scopus appeared in 1986 (Ferris & Rykaczewski, 1986 ), and that publications in the field have grown over the last 35 years (1986–2020). With only a single publication in 1986 and single-digit publications in each ensuing year up to 2006, the field of sustainable finance has proliferated considerably in the next 15 years, with a record high of 193 publications in 2020. Noteworthily, an exponential increase in publications is witnessed from 2015 onwards, which is the year when the Paris agreement and the SDGs were signed by United Nations Member States. This is supported by a detailed scrutiny of the corpus, whereby close to 70% of articles were published between 2015 and 2020, thereby reaffirming 2015 as a landmark year for sustainable finance research.

Year-wise publication for sustainable finance research between 1986 and 2020

4.1.2 Most influential articles for sustainable finance research

The most influential articles for sustainable finance research in terms of citations are presented in Table 1 . The table indicates that Dedusenko’s ( 2017 ) article is the most cited article in the field, with an average of 43.67 citations per year and a total of 655 citations since its publication in 2006. This is followed by Viviers, Ractliffe, and Hand’s ( 2011 ) and Roundy’s ( 2019 ) articles in Journal of Banking and Finance and Journal of Financial Economics , which have been cited 500 and 431 times, respectively. Interestingly, the top three most-cited articles in the field are about impact investing, which highlights its prominence influence in the field. Noteworthily, the top 25 most-cited articles in the field have amassed a total of 5970 citations, which reflects the significant influence that sustainable finance research has had in the scientific community.

4.1.3 Top contributing journals for sustainable finance research

The corpus of 936 articles on sustainable finance were published across 416 journals, with Table 2 indicating that the top 24 contributing journals with a minimum of five articles on sustainable finance have published 334 (35.68%) articles in the field. Specifically, the top three most prolific journals are Sustainability , Journal of Business Ethics , and Journal of Sustainable Finance and Investment , with 52, 47, and 42 articles, respectively. However, in terms of influence, Journal of Business Ethics leads the pack with 2712 citations, followed by Journal of Banking and Finance and Climate Policy , with 1422 and 458 citations, respectively. Noteworthily, most of the top contributing journals have an impact factor above one and they are rated favorably (3 and 4) in the Academic Journal Guide by the Chartered Association of Business Schools, which indicates that sustainable finance as an area of research has received attention from some of the best journals in the field.

4.1.4 Top contributing authors for sustainable finance research

The top contributing authors for sustainable finance research are presented in Table 3 . The table indicates that Scholtens B. from University of Groningen, Netherlands and Cortez M.C. from University of Minho, Portugal are the two most prolific authors in the field with 10 articles each. This is followed by Richardson B.J. from University of British Columbia, United States and Dorfleitner G. from University of Regensburg, Germany with nine and eight articles, respectively. However, the most influential authors are S. Viviers from Stellenbosch University, South Africa and Hockerts K. from Copenhagen Business School, Denmark with 591 and 577 citations, respectively, though the latter (TC/TP = 144.28; TC/TCP = 192.33) yields a better average return of citations each year than the former (TC/TP and TC/TCP = 118.20). Taken collectively, the top 25 contributing authors for sustainable finance research have contributed a total of 132 (14.10%) articles that have amassed 2127 citations in the field.

4.1.5 Top contributing institutions for sustainable finance research

The top contributing institutions for sustainable finance research are presented in Table 4 . The table indicates that the most prolific institution in the field is University of Regensburg, Germany with 15 articles, followed by University of Oxford, United Kingdom with 13 articles, and University of British Columbia, Australia and University of California, United States with 12 articles each. However, the most influential institution is Tilburg University, the Netherlands with 1050 citations, followed by University of Mino, Portugal and Maastricht University, the Netherlands with 846 and 698 citations, respectively. Taken collectively, the top 25 contributing institutions for sustainable finance research have contributed a total of 211 (22.54%) articles that have amassed 6439 citations in the field.

4.1.6 Top contributing countries for sustainable finance research

The top contributing countries for sustainable finance research are presented in Table 5 . The table indicates that the most prolific country is the United States with 242 articles, followed by the United Kingdom and Germany with 131 and 90 articles, respectively. The United States and the United Kingdom also emerge as the top two most influential countries, with 4,986 and 2,799 citations, respectively, and they are joined by the Netherlands, which is the third most influential country with 2,194 citations. However, Portugal yields the highest average citation of 78.27 for the 13 articles that authors from the country have contributed to the field. While American and European countries dominate the list of the top 25 contributing countries, there is notable representation from African countries such as South Africa, Asian countries such as China and India, and Oceanic countries such as Australia. Despite this representation, only 71 out of 936 articles have drawn samples from African and Asian countries, which shows that the majority of research on sustainable finance continue to be America and Europe focused. Nonetheless, upon detailed scrutiny, we observe that sustainable finance research in African and Asian countries have begun to appear more prominently in the recent decade (2011–2020) (Fonta et al., 2018 ; Rajan et al., 2014 ; Urban & George, 2018 ; Viviers et al., 2011 ), which should and will likely to continue in the future.

4.1.7 Methodological choices and research contexts for sustainable finance research

The methodological choices (i.e., research approach, research design, data collection technique, and data analysis tool) and research contexts (i.e., industry focus, research focus, and geographical focus) for sustainable finance research are presented in Table 6 across decades and over a cumulative period of 35 years (1986–2020).

Panel A of Table 6 depicts the preference of research approach for sustainable finance research. The qualitative approach tops the chart as the most preferred research approach across all decades, with 53% of articles in the field using this research approach. The quantitative approach is the next most preferred research approach, constituting 38% of articles, whereas a mixed combination of the two approaches represents only 7.5% of articles in the corpus. Noteworthily, the share of the qualitative approach has been declining while the quantitative approach and the mixed approach have both gained increasing popularity over time, whereby the increased share of the quantitative approach being a reflection of the growing availability and accessibility of sustainable financial data, and the share of the mixed approach being a reflection of the increasing rigor required to publish sustainable finance research over time.

Panel B of Table 6 exhibits the preference of research design for sustainable finance research. The conceptual and empirical research designs were equally preferred in the field’s early years (37.03%), though a stronger preference for empirical research designs and a declining preference for conceptual research designs occur over time. There is also a notable increase in review research designs as time passes, which indicates the growing maturity of sustainable finance research given that reviews are a stock take of mature fields of research (Donthu et al., 2021a ). The same observation applies for the mixed research design, which is another point to substantial our previous inference that the expectation of rigor in sustainable finance research has increased over time. Nonetheless, interest in modeling research designs fluctuate and continue to remain relatively small.

Panel C of Table 6 illustrates the preference of data collection techniques for sustainable finance research. Noteworthily, archival data is the most preferred data collection technique across all time periods (46.15%), followed by interviews (23.29%) and case studies (19.66%). Surveys account for only 9.08%, whereas laboratory data makes up for only 0.75% of the corpus, which indicates that sustainable finance research have plenty of room to grow using a quantitative approach predicated on primary data. The rest of the 13.03% of the corpus do not utilize any data as they are mainly conceptual articles.

Panel D of Table 6 indicates the preference of data analysis techniques for sustainable finance researcher. Descriptive (28.31%) and regression (23.93%) techniques appear to be most preferred, with a large majority of studies not employing any specific data analysis techniques (38.03%). With regards to the former, we observe that research employing descriptive analysis typically offer basic descriptions of total, percentage, mean, median, and graphical representation of statistics, and advance descriptions using statistical analysis such as frequency analysis, t -test, and chi-square test, whereas research using regression analysis usually provide insights from ordinary least squares, logit, probit, panel, and vector-auto regression models. With regards to the latter, the nascent stage of sustainable finance in developing countries, which have yet to integrate sustainable finance in the economy and financial markets, could have led to a dearth of quantitative and statistical data for analysis, and thus, explaining why a large majority of studies do not employ any specific data analysis techniques. The rest of the 9.94% of the corpus have used other data analysis techniques such as CAPM modeling, Carhart modeling, data envelopment analysis, mathematical modeling, and variance-based techniques such as ANOVA, ANCOVA, MANOVA, and MANCOVA.

Panel E of Table 6 presents the industry focus of sustainable finance research. The panel indicates that research in the field have not been very focused to a specific industry as close to 70% of studies have not specified any industry of focus in their articles. Nonetheless, 30% of studies have adopted an industry focus, with services, especially financial services, being a highly popular industry due to the nature of sustainable finance (16.77%). Only 4% of studies have shown a preference for manufacturing, with a special focus given to energy and allied sectors due to the concepts of carbon, climate, and green financing. The rest of the corpus (9%) focus on both services and manufacturing, which have nonetheless been on a declining trend over time, indicating that the differences in each industry may be considerably challenging to be covered in a single study.

Panel F of Table 6 reveals the research focus of sustainable finance research in line with the classification by Gupta et al. ( 2009 ). The vast majority (93.2%) of studies in the field have focused on the application of existing concepts in the real-world settings, with few studies building (0.21%) and verifying (6.62%) theories, which signals immense room for theory development and testing to theorize phenomena on sustainable finance beyond the limited re-use of traditional theories such as agency theory, institutional theory, legitimacy theory, modern portfolio theory, resource dependency theory, and stakeholder theory.

Finally, Panel G of Table 6 shows the geographical focus of sustainable finance research. Though most studies have not focused on any specific country (67.52%), those studies that have are often seen focusing on a single country (22.54%) as opposed to multiple countries (9.94%), most of which are of a developed (89.10%) rather than a developing (10.90%) status.

4.2 Science mapping

Science mapping is an analysis that uncovers and provides a graphical representation of what knowledge exist and how they are interrelated in a domain (Donthu et al., 2021a ), and in this case, sustainable finance research. The science mapping of sustainable finance research is carried out using two bibliometric analysis techniques in VOSviewer, namely a temporal analysis using word clouds to unpack the major topics characterizing sustainable finance research across each time period, and a network analysis using keyword co-occurrence to reveal the major themes underpinning the intellectual structure of sustainable finance research over the last 35 years (1986–2020).

4.2.1 Temporal analysis using word clouds for sustainable finance research

The corpus of articles on sustainable finance research was segmented into four time periods: 1986 to 1995, 1996 to 2005, 2006 to 2015, and 2016 to 2020. The major topics in each time period uncovered through a temporal analysis are illustrated through the word clouds in Figs. 4 , 5 , 6 and 7 .

Sustainable finance research between 1986 and 1995

Sustainable finance research between 1996 and 2005

Sustainable finance research between 2006 and 2015

Sustainable finance research between 2016 and 2020

Figure  4 depicts the advent of “socially” “responsible” “investing” in the initial years of sustainable finance research between 1986 and 1995, wherein aspects such as “activities”, “beliefs”, “costs”, “personal” and “private” “portfolio”, “reputation” “management”, and “successful” “performance” were explored, including the use of theories such as “Keynes”(ian) “economics” (Camey, 1994 ; Diltz, 1995 ; Ferris & Rykaczewski, 1986 ; Herremans et al., 1993 ; Pierce, 1993 ).

Figure  5 exhibits the continued growth of “socially” “responsible” “investing” between 1996 to 2005 through the exploration of new areas that include “business-social” “activism”, “agency”, “challenges”, “responsibility”, and “strategies” for “communicating” and “making” a “difference” in “carbon”, “climate”, “ethical”, and “green” “issues”, the “funds” available for “investment, as well as the “implications” of this “alternative” “finance”, “changing” “behavior”, “debate”, and “diversification” for the “board”, “companies”, “consumer”, “corporations”, “investor”, and “shareholder”. The field in this decade also “gradually” “develops” toward addressing “contradictions” among “capitalists” to create a “better” impact on the “bottom-of-the-pyramid” and “eco-efficiency”, as well as finer-grained insights at the country level, such as those relating to “Austrian” and “Canadian” “companies”.

Figure  6 illustrates the continued growth of “socially” “responsible” “investing” between 2006 and 2015, including the noteworthy proliferation of research that begun in the previous decade relating to “carbon” and “climate” “fund” and “stock”, and the “case” or “evidence” of the “adaptation”, “change”, “impact”, and “role” that such “investments” have for “sustainability” and “sustainable” “development”. There is also ongoing research on “ethical” and “green” “funds” and their equivalent “costs”, as well as a greater presence of “empirical” “analysis” and inclusion of the “global” “economy” and “international” “markets” such as “Africa” and the “European” “market”. “Conscious” “capitalism” also emerges alongside “environmental”, “social”, and “governance” or “ESG” “fiduciary” and “mutual” “responsibility” among “corporate” “investors” and the aforementioned areas in this period (Halbritter & Dorfleitner, 2015 ; Jackson, 2013a , 2013b ; Mekonnen, 2014 ; Ryan, 2012; Viviers et al., 2011 ).

Finally, Fig.  7 indicates that “climate”, “green”, “impact”, and “social” finance” and “investment” took center stage between 2016 and 2020 subsequent to the “Paris” agreement and the launch of the SDGs in 2015. Noteworthily, the “study” of sustainable finance in this five-year period has engaged and presented a “case” “analysis” and “evaluation” of the “bond”, “equity”, and “fund” “portfolio” manifested through the aforementioned sustainable finance concepts in tandem with the “adaptation”, “agreement”, “approach”, “change”, “governance”, “model”, “policy”, and “risk” involved, as well as the corresponding “evidence” of the “role” and “impact” of such “investments” among “corporate” “investors” toward “ESG” “performance” and “sustainable” “development”, including in “emerging” and “international” “markets” such as “energy” and “China”, respectively.

4.2.2 Network analysis

Unlike the temporal analysis that employs word clouds and segments the corpus of articles on sustainable finance according to time periods to unpack the temporal evolution of topics in the field, the network analysis uses keyword co-occurrence on the entire corpus to unpack the major themes that characterize the intellectual structure of sustainable finance research since its inception in 1986 up to 2020. In this regard, the network analysis using keyword co-occurrence consolidates a wide range of topics according to thematic similarity, thereby shedding light on the major themes (or knowledge departments) in the field of sustainable finance. The major themes that emerged from the keyword co-occurrences in the network analysis of the entire corpus generated through VOSviewer are illustrated in Fig.  8 , whereas the accompanying descriptive is presented in Table 7 and the interrelatedness between themes is reported in Table 8 .

Keyword network of sustainable finance research. Red = socially responsible investing. Green = climate financing. Dark blue = green financing. Yellow = impact investing. Purple = carbon financing. Light blue = energy financing. Orange = governance of sustainable financing and investing. (Color figure online)

In total, the results of the network analysis of keyword co-occurrence presented in Fig.  8 and Table 7 reveal eight major themes pertaining to sustainable finance, namely socially responsible investing (first and red cluster), climate financing (second and green cluster), green financing (third and dark blue cluster), impact investing (fourth and yellow cluster), carbon financing (fifth and purple cluster), energy financing (sixth and light blue cluster), and governance of sustainable financing and investing (seventh and orange cluster).

The accompanying metrics in Table 7 shed light on the total occurrence (TO) of each keyword or topic, the degree of centrality (DC) measuring the number of connections for each keyword or topic, and the eigenvector centrality (EC) measuring the relative importance of each keyword or topic in terms of its connection to other keywords or topics, wherein keywords or topics with a high number of connections that are also connected to other keywords or topics with such characteristics will receive a higher EC score (Donthu et al., 2021a ).

The nature of interrelatedness of each major theme is reported in Table 8 , wherein two-way contributions are observed, though the contributions of one way may be notably more than the other way. For example, the table indicates that impact investing (fourth cluster) contributes 19.58% to socially responsible investing (first cluster), whereas the contribution of the opposite is 10.38%. Similarly, the table indicates that energy financing (sixth cluster) and governance of sustainable financing and investing (seventh cluster) contribute 23.50% and 21.23% to climate financing (second cluster), whereas the contributions of the opposite are 10.82% and 6.62%, respectively. Noteworthily, each keyword or topic can be primarily assigned to a major theme or cluster (Total %K = 100%), though their links (relationships) can span across themes or clusters (Total %L > 100%), thereby reflecting both the disciplinary and interdisciplinary nature of research on sustainable finance. The summaries of each major theme or cluster are presented next.

4.2.2.1 Cluster 1 (red): socially responsible investing

The largest cluster pertains to socially responsible investing, comprising 28.14% of total keywords and 42.75% of total links in the network of sustainable finance research. The most popular keyword or topic in this cluster is “socially responsible investing”, which appears in 175 articles and is connected to another 120 keywords. Other popular keywords or topics in this cluster that are researched in conjunction with socially responsible investing include “investment”, “corporate social responsibility”, “sustainability”, “socially responsible investment”, “mutual funds”, “decision making”, “ESG”, “corporate governance”, and “financial performance”. Under this cluster, researchers have explained the performance of socially responsible funds and their outperformance over regular mutual funds (Jafri, 2019 ), the ethical requirements to fulfill social responsible investing (von Wallis & Klein, 2015 ), and how ESG scores can enhance investment decision making (Chow et al., 2014 ), among others.

4.2.2.2 Cluster 2 (green): climate financing

The second largest cluster relates to climate financing, consisting of 18.61% of total keywords and 42.43% of total links in the network of sustainable finance research. The most popular keyword or topic on climate financing is “climate change”, which appears in 150 articles and is connected to another 166 keywords or topics. Other popular keywords or topics in this cluster that are researched in conjunction with climate financing include “environmental policy”, “developing world”, “adaptive management”, the “United Nations Framework Convention on Climate Change”, “greenhouse gases” and the “Paris Agreement”. Under this cluster, researchers have focused on the effects of climate change and the need for climate financing to mitigate greenhouse gases contributing to climate change in line with transnational agreements and frameworks (Dam & Scholtens, 2015 ; Gutiérrez & Gutiérrez, 2019 ; Ibrahim et al., 2016 ; Skovgaard, 2015 ), among others.

4.2.2.3 Cluster 3 (dark blue): green financing

The third largest cluster pertains to green financing, containing 15.15% of total keywords and 35.19% of total links in the network of sustainable finance research. The most popular keyword or topic on green financing is “environmental economics”, which appears in 82 articles and is connected to another 165 keywords. Other popular keywords or topics in this cluster that are researched in conjunction with green financing include “sustainable development”, “China”, “financial system”, “risk assessment”, “green economies”, “sustainable development goals”, “market conditions”, and “financial provisions”. Under this cluster, researchers have highlighted the promise of environmental protection through green finance and policies (Tan et al., 2017 ), as well as the contributions of green bonds and hybrid innovative instruments toward achieving the sustainable development goals (Alessandrini & Jondeau, 2020 ; Muhamat et al., 2017 ; Vazquez & Chin, 2019 ), among others.

4.2.2.4 Cluster 4 (yellow): impact investing

The fourth largest cluster relates to impact investing, encapsulating 12.12% of total keywords and 22.67% of total links in the network of sustainable finance research. The most popular keyword or topic in this cluster is “finance”, which appears in 110 articles and is connected to another 188 keywords, followed by “impact investing”, which appears in 56 articles and is connected to another 69 keywords. Other popular keywords or topics in this cluster that are researched in conjunction with impact investing include “social impact”, “innovation”, “stakeholder”, “social enterprise”, “strategic approach”, “United Kingdom”, “India”, and “political economy”. Under this cluster researchers have demonstrated how social enterprises and social entrepreneurship engage in social impact investments and innovations through social impact bonds and hybrid instruments (Abadie et al., 2013 ; Richardson, 2014 ; Roehrer & Kouadio, 2015 ), as well as business models for sustainability for impact investing and social impact bonds (Malhotra & Thakur, 2020 ), among others.

4.2.2.5 Cluster 5 (purple): carbon financing

The fifth largest cluster pertains to carbon financing, including 9.96% of total keywords and 24.17% of total links in the network of sustainable finance research. The most popular keyword or topic on carbon financing is “emission control”, which appears in 36 articles and is connected to another 102 keywords or topics. Other popular keywords or topics in the cluster that are researched in conjunction with carbon financing include “financial market”, “carbon emission”, “commerce”, “clean development mechanism”, “carbon”, “emissions trading”, “empirical analysis”, and “energy efficiency”. Under this cluster, researchers discuss the feasibility and implementation of carbon finance (Pinsky et al., 2019 ), the carbon market crisis and clean development mechanism required for adapting funds and emissions trading (Harmeling & Kaloga, 2011 ) in international markets (Lesser et al., 2014 ), and the societal perceptions of socially responsible financing, including that emerging from carbon financing, for sustainable development (Escrig-Olmedo et al., 2013 ), among others.

4.2.2.6 Cluster 6 (light blue): energy financing

The sixth largest cluster relates to energy financing, which is made up of 8.66% of total keywords and 19.54% of total links in the network of sustainable finance research. The most popular keyword or topic on energy financing is “renewable energy”, which appears in 27 articles and is connected to another 79 keywords. Other important keywords or topics in the cluster that are researched in conjunction with energy financing include “private sector”, “energy policy”, “alternative energy”, “financial services”, “fossil fuel”, “economic growth”, “Africa”, “environmental impact”, and “investment incentive”. Under this cluster, researchers have shed light on impact investment options that include energy finance focusing on alternative and renewable energy (Geobey & Callahan, 2017 ; Marti, 2013 ), including in developing economies such as the Middle East (Sisodia et al., 2020 ), among others.

4.2.2.7 Cluster 7 (orange): governance of sustainable financing and investing

The seventh largest cluster pertains to governance of sustainable financing and investing, which represents 7.36% of total keywords and 13.22% of total links in the network of sustainable finance research. The most popular keyword or topic in this cluster is “governance approach”, which appears in 30 articles and is connected to another 108 keywords. Other important keywords or topics in the cluster that are researched in conjunction with governance of sustainable financing and investing include “economics”, “economic development”, “environmental management”, “Redd+”, “Japan”, “environmental planning”, “environmental performance”, and “Latin America”. Under this cluster, researchers have focused on the alignment of global financial markets with the Paris agreement (Thomä et al., 2019 ), economic development through sustainable finance (Pinsky et al., 2020 ), and sustainable financing instruments for sustainable development (Zhang et al., 2020 ). For example, Thomä et al. ( 2019 ) explored a common set of accounting principles to be utilized for the alignment of equity and bond asset classes and multiple stakeholders towards the Paris agreement, whereas Pinsky et al. ( 2020 ) shed light on the governance process of REDD+ and performance-based mechanisms to incentive developing countries to engage in sustainable finance.

5 Forging the way forward

Sustainable finance has been and will continue to remain relevant for business schools, financial institutions, financial markets, and regulators. Noteworthily, both developed and developing countries are increasingly seen to be mandating SDG attainments through sustainable finance such as carbon, climate, and green financing (Dikau & Volz, 2021 ; Elavarasan et al., 2021 ; Taghizadeh-Hesary & Yoshino, 2019 ), whose importance are likely to magnify post the COVID-19 pandemic because of the setbacks that the pandemic has inflicted on the world’s progress toward the agenda of greater sustainability (United Nations, 2021 ). Besides that, financial markets are always on the lookout for innovative sustainable finance instruments that they can opportunistically leverage to meet economic demands whilst making impactful contributions toward sustainability and sustainable development, especially with regards to the attainment of the SDGs and the reduction of carbon footprint in accordance with the Paris agreement (Muganyi et al., 2021 ; Yu et al., 2021 ). Similarly, investors today are showing greater interest in ESG and socially responsible investment funds, giving directives to fund managers to screen and pursue funds for impact investing (Alda, 2020 , 2021 ; Chen et al., 2021 ; Joliet & Titova, 2018 ; Yesuf & Aassouli, 2020 ). Taken collectively, a continuous stream of new insights is thus required to ignite and satisfy evolving demands for sustainable finance.

With the growth in the body of knowledge and the availability of data on transactions specific to sustainable finance, future researchers can expect to be in a much more privilege position as compared to past researchers when they examine the direct and indirect causes and effects of myriad aspects of sustainable finance, especially in terms of its performance and return (Chen & Ma, 2021 ; Kling et al., 2021 ; Tian & Lin, 2019 ; Yao et al., 2021 ; Zhang, 2021 ). Indeed, the growing interest in sustainable finance has been evidenced in this review through the notable increase in the number of related research articles over the years, as well as the increased participation of investors and regulators in the field (Li et al., 2020 ; Schulz et al., 2020 ). More importantly, our reading of the articles and reflection of extant gaps under each major theme have led to several suggestions that should pave the way forward for future research to pollinate the field of sustainable finance in meaningful ways. Specifically, we observe that the major themes in the existing corpus have largely focused on the different types of sustainable finance (e.g., socially responsible investing, climate financing, green financing, impact investing, carbon financing, and energy financing), with the theme of governance being the noteworthy exception. While concepts such as green financing, carbon financing, and energy financing appear to be relatively similar at first glance, they can be differentiated through their research focus: green financing concentrates on increasing the financial flow (e.g., banking, micro-credit, insurance, and investment) across sectors (e.g., public, private, and not-for-profit) to sustainable development priorities more broadly, whereas carbon and energy financing focus on doing the same but for sustainable development priorities specific to carbon emission (e.g., greenhouse effects) and energy (e.g., renewable energy), respectively. We also realize that the major themes are interrelated and can therefore affect one another. In light of our learning of the field’s composition and trajectory, we have deliberately decided to curate a future research agenda based on our reflection of the commonalities in the extant gaps and future research directions that we found from literature published within the last five years (2016–2020) that remain relatively underexplored, a summary of which we present in Table 9 and discuss in the next sections.

5.1 Developing and diffusing innovative sustainable financing instruments

The necessity for innovative financing instruments that can mobilize funds toward sustainable development has increased for both developed and developing economies as a result of the COVID-19 pandemic, an unprecedented global catastrophe that has reversed much of the world’s progress in sustainability (United Nations, 2021 ). Though many researchers are addressing this need through studies on socially responsible investing, climate financing, green financing, impact investing, carbon financing, and energy financing, most results remain inconclusive as the field continues to provide limited insights on broad range of financial markets, especially emerging financial markets other than China (Ari & Koc, 2021 ; Sinha et al., 2021 ). Some researchers have reasoned that funding for sustainable finance and sustainable development continues to be developing, and thus, more empirical evidence in both established and emerging markets is needed (Clark et al., 2018 ). Noteworthily, venture capital investments play a pivotal role to propel innovation in sustainable financing and impact investing given the magnitude of funds that they make available, as seen through financial markets such as China, where government interventions and market forces have encouraged such investments in ways that lead to cleaner and sustainable environments (Chen et al., 2021 ). Moreover, the issuance of innovative sustainable financing instruments can assist firms in attaining stock liquidity (e.g., the issuance of green bonds affects stock prices positively), yet limited issuance of such instruments exist in emerging financial markets such as India (Tang & Zhang, 2020 ). More importantly, innovative sustainable financing instruments can only become popular in financial markets if they are supported by formal and information institutions as they play an important role to increase its supply as well as consumer and corporate investors’ awareness, understanding, and demand of the benefits and costs of such financing and investing options in financial markets (Cui et al., 2020 ). Therefore, we propose five research questions to enrich understanding and prescription of innovative sustainable financing instruments, which can be applied to the existing ones discovered through our review or to propel the development of newer ones moving forward:

What value do innovative sustainable financing instruments offer, and how can such value be improved or sustained?

To what extent are innovative sustainable financing instruments feasible for adoption and implementation in emerging markets, and what actions can be taken to improve feasibility?

To what extent are innovative sustainable financing instruments linked with investors preference, and what actions can be taken to improve that link?

To what extent are innovative sustainable financing instruments successful in meeting their objectives, and what actions can be taken to improve or sustain success?

How can formal and informal institutions curate, influence, and shape innovative sustainable financing instruments?

5.2 Magnifying and managing the profitability and returns of sustainable financing

The performance cost of sustainable financing can be managed through optimal adjustments of portfolios (Fu et al., 2020 ). However, the same may not be possible across all markets due to the limitations of available investment avenue sets and tied rewards with impact (Geczy et al., 2021 ). The intermediation cost is also higher for sustainable financing than traditional financing as on the one hand firms in low-income countries with social impact do not have access to funds (World Bank Enterprise Survey, 2017) while on the other hand many investors in high-income countries are unable to find the right cause to invest (Kollenda, 2021 ). Moreover, it was found that the finance cost of green bonds is no less than non-green bonds in China (Cao et al., 2021 ). Therefore, future research needs to offer new ways to manage the profitability and returns of sustainable financing in lucrative and sensible ways, as summarized through the following research questions:

What are the benefits, costs, opportunities, and threats of sustainable financing across markets?

How can the benefits, costs, opportunities, threats, and ways forward for sustainable financing be conceptualized in and managed through an operational framework that accounts for and speaks to myriad stakeholders (investors, institutions, regulators)?

5.3 Making sustainable finance more sustainable

Assessing the sustainability of sustainable finance and rewards of impact investing is difficult. Investors also often demand non-financial performance metrics for such investments, with carbon footprints, exposure metrics, and ESG ratings gaining popularity despite their inherent limitations and shortcomings (Popescu et al., 2021 ). Dorfleitner et al. ( 2021 ) found most of socially responsible funds in the United States to be marred by persistent ESG controversies, which have led to calls by scholars such as Quatrini ( 2021 ) for mechanisms and strategies to address the existing flaws in the assessment of sustainable investments, which is both important and urgent to accelerate the world’s recovery from the aftermath of the devastating effects of the COVID-19 pandemic on the progress of sustainability (United Nations, 2021 ). Therefore, we encourage future research to pursue three research questions that should make sustainable finance more sustainable:

To what extent does investing in sustainable funds lead to sustainable returns, and how can it be improved or sustained?

To what extent does sustainable finance enable firms to avoid controversy related to ESG, and how can it be improved or sustained?

To what extent are sustainable funds sustainable before, during, and after crises such as the COVID-19 pandemic?

5.4 Devising and unifying policies and frameworks for sustainable finance

Regulators and financial institutions are pushing forth the sustainable finance agenda to attain the SDGs across markets (Dikau & Volz, 2021 ; Elavarasan et al., 2021 ; Taghizadeh-Hesary & Yoshino, 2019 ). Past research has indicated that the integration of green financial systems in traditional financial system can lead to sustainability controls and cleaner production (Ng, 2018 ), and that the incorporation of green governance structures can assist in lower financing constraints (Li et al., 2020 ), which suggest that regulators and financial institutions need to set up sustainability performance policies and frameworks (Jan et al., 2021 ). Yet, myriad policies and frameworks exist within and across markets, wherein such inconsistencies or non-complementariness can hinder the potential of sustainable finance. Hence, it is important to understand the role of regulators and financial institutions in sustainable finance, and crucial to that understanding is the development and unifying of policies and frameworks that communicates a common and mutual language, which are noteworthy directions for future research that we summarized through the following research questions:

What is the role and impact of regulators and financial institutions on sustainable finance (e.g., availability and performance of sustainable funds and instruments)?

How can policies and frameworks for sustainable finance be developed and unified within and across markets?

5.5 Tackling greenwashing of corporate sustainability reporting in sustainable finance

While earlier studies focused on the positive signals of ESG and impact investing on firm performance and concluded strong evidences of higher financial performance (Garcia et al., 2017 ; Rezaee & Tuo, 2017 ), recent studies have started questioning the quality of corporate sustainability reporting metrices and provided strong evidences of greenwashing of sustainability reports across markets (Arouri et al., 2021 ; Chen & Yang, 2020 ; Huang, 2020 ; Yu et al., 2020 ), with few studies rejecting greenwashing tendency of firms across sectors and markets (Uyar et al., 2020 ). Government regulations in the form of penalties and tax subsidies have nonetheless been evidenced to be effective to mitigate greenwashing in China (Sun & Zhang, 2019 ). Nonetheless, the evidence that avail remains inconclusive and limited, thereby suggesting potential for future research, especially across markets. Therefore, we propose the following research questions for future undertaking:

To what extent do firms engage in greenwashing of sustainability reports, and how can this be discouraged or mitigated?

To what extent do firms engage in sustainable finance to manipulate traditional financial performance measures, and how can this be discouraged or mitigated?

To what extent do firms engage in earnings manipulation with funds from sustainable financing, and how can this be discouraged or mitigated?

In which markets do greenwashing of sustainability reports more or less prominent, and what can we learn from the latter and to what extent will it work for the former?

5.6 Shining behavioral finance on sustainable finance

In the American and European stock markets, socially responsible investing is associated with large firms and abnormal returns (Mollet & Ziegler, 2014 ), with many socially responsible investors willing to forgo financial performance to pursue ethical or social objectives (Renneboog et al., 2008 ). Most scholars focus on the comparative performance between socially responsible funds and traditional funds along with associated screening and evaluation criteria (Chatzitheodorou et al., 2019 ), with studies showing better performance of socially responsible funds over traditional funds (Pedersen et al., 2020 ), higher market-to-book ratios and higher return on assets for socially responsible investors (Dam & Scholtens, 2015 ), and an opportunity to reduce systematic risk for investors (Cerqueti, 2021 ; Behl et al., 2021). However, little is known about the actual perceptions and behaviors toward sustainable finance, including that of and beyond socially responsible investing, which may be due to the lack of quantitative and survey social science-oriented research in sustainable finance. This is particular important given that the outperformance of sustainable finance may not necessarily continue in the long run due to the external shocks such as the COVID-19 pandemic, the increasing awareness of greenwashing of sustainability reports, and the overpricing such stocks (Bofinger, 2021 ). In this regard, we call for additional research that seeks to shine a behavioral finance light in this direction through the following research questions:

How do investors benefit from sustainable finance?

How do investors perceive sustainable finance?

What is the role of personality and behavioral biases of investors while selecting impact investing-based funds over conventional funds?

5.7 Leveraging the power of new-age technologies for sustainable finance

Last by not least, in our final reflection of this review, we stumbled upon the greatly astonishing state of sustainable finance, wherein the application and discussion of new-age technologies in sustainable finance research is almost virtually non-existent despite its omnipresence in other fields such as business sustainability (Sivarajah et el., 2020 ), sustainable automotive (Kamble et al., 2021 ) and humanitarian supply chain (Bag et al., 2020 ), sustainable logistics service quality (Gupta et al., 2021 ), and sustainability marketing (Bolton, 2021 ). In essence, new-age technologies refer to new technologies that emerge as new industrial revolutions surface, with technologies such as artificial intelligence, blockchain, internet of things, and machine learning being born out of the recent fourth industrial revolution (IR4.0) (Gupta et al., 2020 ). Noteworthily, IR4.0 is characterized as an era of digital transformation, which holds great potential for sustainability (Roblek et al., 2020 ). In fact, new solutions to get the world’s progress on sustainability back on track has never been greater given that the COVID-19 pandemic has reversed years of existing progress (United Nations, 2021 ), and we opine that future research that explains how new-age technologies can be applied to sustainable finance can make significant contributions to the world’s recovery and prosperity in the post-pandemic era, a contention that is supported by the central role that finance plays in funding digital transformation (Akter et al., 2020) and sustainability endeavors Cunha et al. ( 2021 ). In this regard, we call for new research that deliberately ignites and proliferates insights on the application of new-age technologies for sustainable finance through the following research questions:

How can artificial intelligence and machine learning be applied to screen credit applicants and monitor credit users of sustainable financing (e.g., financial distress prediction, credit scoring, corporate insolvency prediction, credit card anomalies detection, fraudulent financial statement detection)?

How can blockchain and machine learning be applied to track and flag impact concerns or successes in the activities of sustainable financing (e.g., carbon, climate, and energy financing) on sustainability goals (e.g., SDGs)?

How can big data analytics and machine learning be applied to acquire knowledge about public sentiments about sustainability issues, and how can sustainable finance providers automate the incorporation of that knowledge in the evaluation and provision of sustainable financing using sustainable alternatives powered by new-age technologies such as artificial intelligence and cloud computing?

How can cybersecurity and machine learning be applied to create a safe, secure, and trusted marketplace for sustainable finance?

How can machine learning be developed and deployed in ways that detect and prevent algorithmic bias for sustainable finance?

How can new-age technologies such as artificial intelligence, blockchain, big data analytics, cloud computing, and machine learning be integrated in tandem with cybersecurity to achieve operational and impact excellence for sustainable finance, and how can the enablers and barriers to this integration be leveraged and resolved, respectively?

How can firms leverage on new-age technologies such as artificial intelligence, blockchain, big data analytics, cloud computing, and machine learning develop or adapt sustainable financing operations and instruments in innovative, smart, and agile ways?

6 Conclusion

This study follows a systematic literature review approach using bibliometric analysis to shed light on the performance and science of sustainable finance research. This approach, which exemplifies the use of big data analytics through machine learning of scholarly research, is especially noteworthy given the astonishing absence of the application and discussion of new-age technologies in sustainable finance research. In doing so, this study contributes in a novel way by leveraging on the power of big data analytics through machine learning—and providing greater visibility to it in the process—to uncover the most influential articles and top contributing journals, authors, institutions, and countries, as well as the methodological choices and research contexts, and by revealing the temporal evolution of topics and the major themes underpinning the intellectual structure for sustainable finance research. To this end, we summarize five key takeaways and their equivalent implications from this state-of-the-art review of 936 articles on sustainable finance over the last 35 years (1986–2020).

First, the performance analysis indicates a consistent growth in publications in the field following the Paris agreement and the launch of the SDGs. Most publications came from authors and institutions in the United States and the United Kingdom as these countries have adopted sustainable finance frameworks and engaging in socially responsible investing much earlier than other developed and developing countries. In this regard, sustainable finance research should expand to underrepresented countries where sustainable finance is gaining momentum (e.g., Africa, Australia, Japan, Malaysia, and Singapore).

Second, the performance analysis also reveals that qualitative research is most prominent in sustainable finance due to the nascent stage of its adoption in most countries and thus the lack of cases and data points required for quantitative research, and that most researchers preferred archival data, with few opting to pursue experiments and surveys. In this regard, it may be worthwhile for sustainable finance research to pursue the latter two data collection techniques that remain underutilized due to their potential to measure chronic and primed responses (Lim, 2015 , 2021 ; Lim et al., 2019 ) among potential stakeholders of sustainable finance, thereby curating equally interesting cause-and-effect insights on its feasibility and market reaction prior to its start up or scale up.

Third, the performance analysis also shows that most studies are application oriented where the aim is to develop policies and frameworks for specific contexts rather than to build and test theories, that most studies focus on single country data where earlier studies concentrate on developed economies such as Europe, the United States, and the United Kingdom and more recent studies coming from emerging economies such as Asia, Africa, and Oceania, and that most studies are inclined toward the service sector, specifically financial services. Therefore, we encourage prospective researchers to proactively view these gaps as opportunities for making new and novel contributions to the enrich and extend understanding of sustainable finance.

Fourth, the science mapping through a temporal analysis reveals that sustainable finance research has contributed myriad insights overtime starting with a single focus on socially responsible investing (1986 onwards) and branching out progressively to other areas such as ethical and green financing and ethical investing (1995 onwards), carbon financing, climate financing, conscious capitalism, CSR, and ESG (2005 onwards), and more recently, impact investing, innovative financial instrument, and SDG (2015 onwards). Noteworthily, the field of sustainable finance will only grow larger in the future, with new innovative sustainable financing instruments being developed over time—as seen through the rise of carbon and climate financing—to shape and satisfy the demands of funding for sustainability and sustainability development.

Fifth, the science mapping through a network analysis of keyword co-occurrence unveils seven major themes that characterize the body of knowledge or the intellectual structure of sustainable finance research, namely socially responsible investing, climate financing, green financing, impact investing, carbon financing, energy financing, and governance of sustainable financing and investing. We observe that six out of seven major themes relate to the types of sustainable finance, with governance being a unique theme on its own. Noteworthily, our reading of the articles and reflection of the extant gaps under each major theme brought us to several underexplored or underrepresented issues that future research can take up to enrich the major themes in sustainable finance research, which include developing and diffusing innovative sustainable financing instruments, magnifying and managing the profitability and returns of sustainable financing, making sustainable finance more sustainable, devising and unifying policies and frameworks for sustainable finance, tackling greenwashing of corporate sustainability reporting in sustainable finance, shining behavioral finance on sustainable finance, and leveraging the power of new-age technologies for sustainable finance.

Notwithstanding the extant contributions from this seminal state-of-the-art review of sustainable finance research, we concede that our review remains limited in several ways. First, our review is limited to the accuracy and completeness of articles made available through the Scopus database. Nonetheless, we have taken due diligence to correct for errorneous entries and to cross-check against publisher websites and other databases to mitigate this limitation. Second, our review provides only a broad overview of the performance and intellectual structure of sustainable finance research. Though this is in line with the goal and value of systematic literature reviews using a bibliometric analysis, wherein large-scale reviews become pragmatically possible, we concede that this approach falls short of providing finer-grained insights into other deserving and interesting pecularties such as the factors (independent, mediating, moderating, dependent) and relationships (positive, negative, linear, curvilinear) that may entail in sustainable finance. In this regard, we encourage future reviews using alternative approaches such as a framework- or theory-based review on sustainable finance, though such reviews do not necessarily need to be large scale—they can be pursued on a smaller scale (e.g., tens to low hundreds of articles) so that the review remains pragmatic and managable, as in the case of Cunha et al. ( 2021 ).

Change history

10 february 2022.

A Correction to this paper has been published: https://doi.org/10.1007/s10479-022-04535-4

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Satish Kumar

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Kumar, S., Sharma, D., Rao, S. et al. Past, present, and future of sustainable finance: insights from big data analytics through machine learning of scholarly research. Ann Oper Res (2022). https://doi.org/10.1007/s10479-021-04410-8

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Article Contents

Sustainable finance.

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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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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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Global evolution of research on sustainable finance from 2000 to 2021: a bibliometric analysis on wos database.

1. Introduction

2. materials and methods, 2.1. data acquisition, 2.2. bibliometric analysis, 3. results and analysis, 3.1. discipline co-occurrence analysis, 3.2. publication characteristics analysis, 3.3. partnership analysis, 3.4. influence analysis, 3.5. keyword co-occurrence analysis, 3.6. co-citation analysis, 3.6.1. timeline view (2000–2015), 3.6.2. timeline view (2016–2021), 3.7. structural variation analysis, 4. conclusions and discussion, 4.1. conclusions, 4.2. discussion, author contributions, institutional review board statement, informed consent statement, data availability statement, acknowledgments, conflicts of interest.

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Luo, W.; Tian, Z.; Zhong, S.; Lyu, Q.; Deng, M. Global Evolution of Research on Sustainable Finance from 2000 to 2021: A Bibliometric Analysis on WoS Database. Sustainability 2022 , 14 , 9435. https://doi.org/10.3390/su14159435

Luo W, Tian Z, Zhong S, Lyu Q, Deng M. Global Evolution of Research on Sustainable Finance from 2000 to 2021: A Bibliometric Analysis on WoS Database. Sustainability . 2022; 14(15):9435. https://doi.org/10.3390/su14159435

Luo, Wenbing, Ziyan Tian, Shihu Zhong, Qinke Lyu, and Mingjun Deng. 2022. "Global Evolution of Research on Sustainable Finance from 2000 to 2021: A Bibliometric Analysis on WoS Database" Sustainability 14, no. 15: 9435. https://doi.org/10.3390/su14159435

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• Understanding Poverty
• Financial Sector

Sustainable Finance

Landscape of fields and homes. Indonesia. Photo: © Curt Carnemark / World Bank

Sustainable Finance is the process of taking due account of environmental, social and governance (ESG) considerations when making investment decisions in the financial sector, leading to increased longer-term investments into sustainable economic activities and projects (European Commission). It has become a powerful movement led by regulators,  institutional investors and asset managers globally. 

Sustainability, however, is a complex and evolving topic. The World Bank Group long-term finance unit has been at the forefront of promoting Sustainable Finance globally – though data provision, analytical work, instrument design and technical assistance to  support regulators and investors in our client countries to ‘green’ their financial systems.

The team’s work on sustainable finance  contributes to several initiatives - namely:

1.  The Global Program on Sustainability  which promotes  the use of high quality-data and analysis on natural capital, ecosystem services and sustainability to better inform decisions made by governments, the private sector and financial institutions.  The GPS program consists of 3 key pillars:

Pillar 1: Information-improving global measurements of natural capital and ecosystem services

Pillar 2: Building countries capacity to produce and use natural capital accounting for policy and planning decisions. It currently works with 18 countries to measure and value natural resources

Pillar 3: Incentives- Promoting research on how environmental Factors impact risk and financial return in fixed income markets.

Below is a sample of recent publications contributed to the GPS Knowledge Center including:

• A new Dawn: Rethinking Sovereign ESG
• Riding the Wave: Navigating the ESG landscape for Sovereign Debt Managers 
• Demystifying ESG, Paving Path: Lessons from Chile’s Experience as a Sovereign Issuer for Sustainable Actions
• Unlocking Private Finance for Nature  

2.  The Sovereign ESG Data Portal  is part of the work supported by the Global Program on Sustainability (GPS), which aims to provide governments and investors with information and tools that improve their understanding of sustainability criteria, including through natural capital accounting.  

3.  Climate Support Facility  is a new flagship trust fund which was launched on December 10, 2020.  The facility manages funding provided under a Green Recovery Initiative aimed at helping countries building a low-carbon, climate-resilient recovery from COVID 19. Germany, the United Kingdom and Austria are its first contributors. The facility support technical assistance and advisory services. This new trust fund will:

• Embed specialized economic advisors in key government ministries to assist with climate-informed national recovery strategies;
• Help countries develop macroeconomic models that incorporate climate into national budgets, enhance their NDCs, and support the development of long-term strategies for decarbonization; and
• Generate new analytical work: including geospatial data on climate risk, the impact of COVID-19 on carbon emissions, and the effect of climate policies on jobs and livelihoods.  

4.  IFC Edge . An innovation of IFC, a member of the World Bank Group, EDGE (“Excellence in Design for Greater Efficiencies”) provides market leaders with the opportunity to gain a competitive advantage by differentiating their products and adding value to the lives of their customers. EDGE brings speed, market intelligence and an investment focus to the next generation of green building certification in more than 170 countries. IFC created EDGE to respond to the need for a measurable and credible solution to prove the business case for building green and unlock financial investment.

5. J-CAP is a five-year program initially focused on six priority countries and one sub-region: Bangladesh, Indonesia, Kenya, Morocco, Peru, Vietnam, and the West African Economic & Monetary Union. Going forward, the program will also work with other countries, including Argentina, to support local capital markets development. 

Under the program, country-specific action plans have been produced that mobilize the World Bank’s technical assistance alongside IFC's demonstration transactions and local currency solutions.  Support for green bond issuance and market development, as well as green regulatory frameworks are a core part of the program.

🌐  Long-term Finance

📗  The emerging application of geospatial data for gaining ‘environmental’ insights on the asset, corporate and sovereign level

📘  Striking the Right Note : Key Performance Indicators for Sovereign Sustainability-Linked Bonds (English)

📙  Sovereign Climate and Nature Reporting: Proposal for a Risks and Opportunities Disclosure Framework (English)

📕  Credit Worthy: ESG Factors and Sovereign Credit Ratings

Home » Research

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.

The Ownership Project

An estimated 70% of global businesses are family-owned. Our research, teaching, and global conversations bring responsibility and sustainability to their core. The Ownership Project provides a platform for knowledge generation and dissemination. We seek to empirically understand the impact of ownership on businesses, communities, and society — and the key factors shaping sustainable ownership in the future.

Research Topics

Esg investments.

ESG is an acronym that combines E nvironmental, S ocial, and corporate G overnance aspects of businesses capturing the non-financial characteristics of firms that may well have material impact on investment returns. ESG metrics of companies are increasingly critical for investment decision-makers.

The Global Sustainable Investment Alliance (GSIA) reported its latest statistics on the global dominance of sustainable investments: by 2020, every third dollar was invested in the financial markets in a sustainable form, in line with the ESG approach. While only 21 per cent of assets under management were ESG-compliant in 2012, the recent surge in ESG investments meant growth exceeded 50 per cent over the six years. The popularity of ESG investing has since grown significantly and is becoming mainstream.

Based on the GSIA  classification, negative screening remains the most popular ESG-based investment strategy. At the same time, thematic investments benefitted from the largest growth of fund inflows in recent years: from 2016 to 2018, thematic funds quadrupled their holdings, now exceeding one trillion USD in assets.

Climate Finance

The discipline of Climate Finance relates to financing of project that help climate change adoption and mitigation efforts.

Green Investments

Investment instruments that specifically have environmental impact targets are labelled as green. Mostly common instruments are Green Bonds, these investments' payout is often contingent upon certain compliance with green goals. By 2020, more than USD 10bn was invested in 172 green bond in 20 different currencies. Their popularity is ever growing among investors.

Biodiversity Finance

Biodiversity finance is a new discipline within nature finance that concerns the funding, and financing the conservation of nature, with particular focus on stopping biodiversity loss in highly-sensitive ecological areas. Unlike climate measures, biodiveristy loss is geography focused, and is yet to develop measurements. Although the existing data vendors rely on the measure of mean species abudance over a space, there is a need for more nuanced methodology to capture nature loss. A starting point for business activities is to conduct a materiality assessment to evaluate the impact of a company's activity on biodiversity, and ecosystems, and the dependenies it has on nature.

Sustainability Risk

Sustainability risk is known as the risk event stemming from environmental or social factors that have a material negative impact on the value of an investment. The EU directive requiring companies to disclose sustainability related risk was enacted in 2021. The topic's importance derives from the shared responsibility of all market participants to tackle sustainability issues. The methodology for measuring sustainability-related risk and including it in finance decisions is an evolving discipline.

Greenwashing or Impact Washing

The act of claiming green efforts or targets, but in fact are misleading, either in an intentional manner or casued unintentionally. Impact washing is similar to greenwashing but is specific to investments. It is aimed at appealing to the ESG conscious investors, but the investment fails to demonstrate achieving of claimed sustainability targets. Recently, greenwashing scandals have surfaced in the investment industry as regulators become more stringent in their scrutiny.

Nature-based Solutions (NbS)

Resolution 069 of IUCN defines NbS as actions to protect, manage and restore natural or modified ecosystems, which address societal challenges, effectively and adaptively, providing human well-being and biodiversity benefits. Societal challenges being climate change, natural disasters, social and economic development, human health, food security, water security, ecosystem degradation and biodiversity loss.

Nature-positive economy

Defined by CISL as an economy in which public and private sector actors, through choice and incentive, take action at scale to reduce and remove the drivers and pressures fuelling the degradation of nature, actively improving the state of nature (natural capital) and the ecosystem services it provides. 

Special issue: Financial Innovation for a Sustainable Future

Background :

The financial sector is increasingly recognized as a critical player in addressing global challenges related to climate change and sustainable development (Edmans & Kacperczyk, 2022). The nexus between finance and sustainability encompasses a wide range of themes, including international financial cooperation, climate finance mechanisms, and their implications for economic growth. This special issue aims to delve deeply into these areas, providing a platform for high-quality research that explores the intersection of finance, sustainability, and growth.

Finance plays a pivotal role in mobilizing the resources necessary to achieve sustainable development goals (SDGs) (Porter, & Kramer, 2011). Financial institutions, through mechanisms like green bonds, carbon markets, and climate finance, are essential in channeling funds towards projects that mitigate climate change, promote renewable energy, and support sustainable infrastructure (Yang et al., 2023).

Climate finance refers to local, national, or transnational financing—drawn from public, private, and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change (Bolton & Kacperczyk, 2021). Mechanisms such as green bonds have emerged as powerful tools in mobilizing private sector investment in climate-related projects.

The relationship between sustainable finance policies and economic growth is complex and multifaceted. Policies that promote green finance can lead to significant economic benefits, including job creation in renewable energy sectors, improved public health through reduced pollution, and enhanced energy security. However, the transition to a sustainable economy also presents challenges, such as the need for substantial upfront investments and the potential for short-term economic disruptions (Galeone, Ranaldo & Fusco, 2024; Starks, 2023).

Technological innovations are transforming the financial sector and creating new opportunities for sustainable finance. Fintech solutions, such as digital platforms for green investments and blockchain-based carbon trading systems, are enhancing transparency, reducing transaction costs, and increasing the efficiency of sustainable finance markets (Dionisio et al., 2023).

The aim of this special issue is to explore the transformative role of financial innovation in fostering a sustainable future. By focusing on the intersection of finance, sustainability, and economic growth, this issue seeks to provide a comprehensive examination of how innovative financial instruments, regulatory frameworks, and international collaborations can drive sustainable development. We aim to gather contributions that highlight cutting-edge research and practical insights into how the financial sector can address global challenges such as climate change, resource scarcity, and social inequality. Through this exploration, we aspire to inform and inspire policies, strategies, and practices that leverage financial innovation to achieve sustainable development goals and create resilient economies.

Objective s :

1. Explore International Financial Mechanisms:

• Investigate the role of international financial institutions and agreements in promoting sustainable development.
• Analyze the effectiveness of cross-border financial initiatives in supporting climate goals and economic growth.

2. Examine Climate Finance Strategies:

• Assess the impact of climate finance on mitigating climate change and fostering sustainable development.
• Evaluate the role of green bonds, carbon markets, and other innovative financial instruments in mobilizing resources for climate action.

3. Understand the Intersection of Finance and Sustainable Growth:

• Investigate the relationship between sustainable finance practices and economic growth at both national and global levels.
• Explore the role of financial policies and regulations in promoting sustainability and resilience in financial systems.

Topics: 

The special issue is particular interested in, but not limited to, the following topics:

• Role of Multilateral Development Banks (MDBs): Explore how MDBs like the World Bank and the Asian Development Bank are financing sustainable projects and the impact of these investments on regional development
• Cross-border Investments: Analyze how foreign direct investment (FDI) and portfolio investments contribute to sustainable development and the conditions necessary for their success
• International Financial Regulations: Examine the influence of international financial standards and agreements, such as the Basel III Accord, on promoting sustainability
• Green Bonds: Study the growth and impact of green bonds in financing sustainable projects and their contribution to reducing carbon emissions
• Carbon Trading Markets: Assess the effectiveness of carbon markets in reducing greenhouse gas emissions and their economic implications
• Public and Private Sector Roles: Evaluate the collaborative efforts of the public and private sectors in mobilizing climate finance and the resulting outcomes
• Sustainable Finance Policies: Investigate how national and international policies promoting green finance influence economic growth and stability
• Financial Inclusion: Explore the role of financial inclusion in achieving sustainable development goals and promoting inclusive growth
• Regulatory Frameworks: Analyze the effectiveness of regulatory frameworks in fostering sustainable investment and mitigating financial risks associated with climate change
• National Strategies: Conduct comparative analyses of national strategies for sustainable finance, highlighting successful policies and initiatives
• International Collaborations: Examine case studies of international collaborations in climate finance, identifying key success factors and challenges
• Technological Innovations: Assess the impact of technological advancements, such as fintech and blockchain, on sustainable finance practices

Important deadlines

• Submissions to the Special Issue due by 30 th June 202 5
• Publication of the Special Issue in 30 th June 2026

Submission Process

Authors are invited to submit original research articles, review papers, and case studies that align with the themes outlined above. Submissions should offer significant contributions to the field of sustainable and climate finance and provide insights that can inform policy and practice. Paper submissions will undergo rigorous editorial screening and double-blind peer review by a minimum of two recognized scholars. The standard requirements of Financial Innovation for submissions apply. Please consult the journal submission guidelines available at https://jfin-swufe.springeropen.com/submission-guidelines .

Guest Editors

Prof essor (Associate) Anna Min Du Edinburgh Napier University , Edinburgh, UK Email:  [email protected]   https://scholar.google.com/citations?user=wfDKamwAAAAJ&hl=en ORCID: https://orcid.org/0000-0002-1715-8774 Area Editor: Research in International Business and Finance (SSCI Q1, ABDC B, ABS2, IF:6.5) Youth Editorial Board Member: Financial Innovation Guest Editor: Energy Economics (SSCI Q1, ABDC A*, ABS3, IF:12.8), Resources Policy (SSCI Q1, ABDC B, ABS2, IF:10.2), Research in International Business and Finance

Professor Brian M. Lucey The University of Dublin Trinity College, Dublin, Ireland Email: [email protected] https://scholar.google.com/citations?hl=en&user=WGptVJMAAAAJ ORCID: https://orcid.org/0000-0002-4052-8235 Editor-in-Chief: International Review of Economics & Finance (SSCI Q1, ABDC A, ABS2, IF:4.5); Journal of Economic Surveys (SSCI Q1, ABDC A, ABS2, IF:5.3) Development Editor: International Review of Financial Analysis (SSCI Q1, ABDC A, ABS 3, IF:8.2)

Professor Samuel A. Vigne LUISS Business School, Viale Romania 32, 162, Roma, Italy Email: [email protected] https://scholar.google.com/citations?hl=en&user=S5cB_dAAAAAJ ORCID: https://orcid.org/0000-0003-1831-617X Editor-in-Chief: International Review of Financial Analysis (SSCI Q1, ABDC A, ABS 3, IF:8.2); Finance Research Letters (SSCI Q1, ABDC A, ABS 2, IF:10.4)

Bolton, P. & Kacperczyk, M. (2021). Do investors care about carbon risk? Journal of financial economics, 142(2), pp.517-549. https://doi.org/10.1016/j.jfineco.2021.05.008   Dionisio, M., de Souza Junior, S.J., Paula, F. & Pellanda, P.C. (2023). The role of digital social innovations to address SDGs: A systematic review. Environment, Development and Sustainability, https://doi.org/10.1007/s10668-023-03038-x Edmans, A., & Kacperczyk, M. (2022). Sustainable Finance. Review of Finance, 26(6), 1309-1313. https://doi.org/10.1093/rof/rfac069   Galeone, G., Ranaldo, S. & Fusco, A. (2024). EGS and Fintech, Are they connected, Research in International Business and Finance, 69, 102225. https://doi.org/10.1016/j.ribaf.2024.102225     Porter, P. & Kramer, M. (2011), Creating Shared Value: How to reinvent capitalism and unleash a wave of innovation and growth, Harvard Business Review. Starks, L.T. (2023). Presidential Address: Sustainable Finance and ESG Issues – Value versus Values. Journal of Finance, 74(8), 1837-1872. https://doi.org/10.1111/jofi.13255   Yang, T., Sun, Z., Du, M., Du, Q. Li, L. & Shuwaikh, F. (2023). The impact of the degree of coupling coordination between green finance and environmental regulations on firms’ innovation performance: Evidence from China, Annals of Operations Research, https://doi.org/10.1007/s10479-023-05704-9

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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 Finance and Impact Investment: A Guide for Sustainable Entrepreneurs

138 Pages Posted:

Alan S. Gutterman

Professional Website

Date Written: September 02, 2024

Sustainable finance is a long-term approach to finance and investing, emphasizing long-term thinking, decision-making and value creation that considers environmental, social and governance (“ESG”) issues.  Sustainable finance has emerged in parallel to aggressive policy initiatives such as the UN’s Sustainable Development Goals and the Paris climate agreement of 2015 as it has become clear that they cannot be realistically undertaken and completed without innovative private sector financing models that allow a wide range of potential investors to participate in high growth, albeit risky and uncertain, opportunities.  This book introduces sustainable investment strategies, the market for sustainable investment, issues for banks and other commercial financing institutions, “blended finance” and the various types of sustainable bonds.  In addition, this book provides an in-depth look into one of those strategies, impact investing, which is notable among the other strategies for not only considering ESG but also intentionally seeking positive change (i.e., social and/or environmental impact) through the selection and management of investees including entrepreneurs launching businesses with a clear social or environmental purpose.  The book explores definitions and core principles of impact investing including the emerging impact investing ecosystem and continues with analysis of impact investment tools and structures, principles for organizing for impact, impact measurement and management and impact reporting.

Keywords: sustainable finance, impact investment, ESG, green bonds, sustainable entrepreneurship

Suggested Citation: Suggested Citation

Alan Gutterman (Contact Author)

Professional website ( email ).

HOME PAGE: http://www.alangutterman.com

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Research Topics & Ideas: Finance

PS – This is just the start…

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.

Overview: Finance Research Topics

• Corporate finance topics
• Investment banking topics
• Private equity & VC
• Asset management
• Hedge funds
• Financial planning & advisory
• Quantitative finance
• Treasury management
• Financial technology (FinTech)
• Commercial banking
• International finance

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

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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. 

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