Green finance for achieving environmental sustainability in G7 countries: Effects and transmission channels

Henda Omri, Bilel Jarraya and Montassar Kahia

Research in International Business and Finance, 2025, vol. 74, issue C

Abstract: This study examines the effectiveness of FinTech (Financial Technology), green finance, and environmental policy in achieving environmental sustainability across G7 countries from 2012 to 2022. By implementing the Hayes Process Macro, our findings show that (i) green finance is positively related to environmental sustainability by reducing CO₂ (carbon dioxide) emissions; (ii) environmental innovation mediates the relationship between green finance and environmental sustainability. Green innovation further acts as a crucial transmission mechanism, translating the inputs from green finance into tangible reductions in ecological footprints and CO₂ emissions; (iii) FinTech, as a moderator, enhances the effectiveness of green finance, particularly in fostering environmental innovation and sustainability efforts; (iv) environmental policy moderates the mediating effect of green finance on environmental sustainability via environmental innovation; (v) the synergy between FinTech and environmental policy optimizes the environmental benefits of green finance. The findings of this study have several significant implications for policymakers, financial institutions, and environmental advocates both within the G7 countries and globally.

Keywords: FinTech; Environmental innovation; Green Finance; environmental policy; environmental sustainability; Sustainable finance (search for similar items in EconPapers)
JEL-codes: G21 O44 Q56 Q58 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:74:y:2025:i:c:s0275531924004847

DOI: 10.1016/j.ribaf.2024.102691

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