The Role of Corporate Financial Strategy in Sustainable Energy Transition: A Systematic Review

Chukwukaelo Uche
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Chukwukaelo Uche: SLB Nigeria Limited, Nigeria and University of Lagos, Nigeria.

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Abstract: Corporate finance strategies are emerging as major facilitators of the global energy transition as people become more aware of climate change and the need for sustainability. This article investigates the role of corporate finance in aiding the transition from traditional fossil fuels to renewable energy sources. The study examines the use of green financing products such as green bonds and sustainability-linked loans, as well as the influence on corporate investments in sustainable energy. It also looks at the financial risks, cost savings, and profitability of renewable energy projects, as well as the challenges faced by high upfront prices and restricted access to funding in poor countries. A systematic literature review (SLR) was carried out to bring together current research on corporate finance strategies, sustainable energy transitions, and associated financial innovations. The findings show that, while green financing solutions provide critical capital for renewable energy projects and boost business reputation, major hurdles persist, particularly in emerging nations. The report concludes with recommendations for increasing access to green financing, improving risk management measures, and promoting public-private partnerships to hasten the worldwide transition to sustainable energy. Businesses may improve their sustainability while still ensuring long-term economic development and stability in an increasingly carbon-conscious society.

Date: 2024-10-05
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Published in Asian Journal of Economics, Finance and Management , 2024, 6 (1), pp.313-326

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05078661

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