Benchmarking Green Financial Policies: Developing a Composite Index for Cross-Country Analysis

Isabelle Distinguin, Laetitia Lepetit (), Frank Strobel and Ruth Tacneng
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Isabelle Distinguin: LAPE - Laboratoire d'Analyse et de Prospective Economiques - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges
Laetitia Lepetit: LAPE - Laboratoire d'Analyse et de Prospective Economiques - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges
Frank Strobel: University of Birmingham, Department of Economics, Birmingham, UK
Ruth Tacneng: LAPE - Laboratoire d'Analyse et de Prospective Economiques - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges

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Abstract: We construct a global database of green financial policies (GFP) for 186 countries from 2006-2024 and develop a composite GFP index comprising three sub-indices that capture transparency, financial-market development, and central-bank actions. Policy adoption has increased considerably since the Paris Agreement, though stringency varies widely across countries. A validation exercise shows that the index predicts green bond issuance, but not social/sustainability bonds or public energy investment, indicating policy specificity. GFP is positively associated with income growth, financial depth, institutional quality, political openness, climate exposure, environmental NGOs, and carbon pricing, and negatively with per capita emissions. The dataset provides a foundation for macro-financial research on the low-carbon transition.

Keywords: Green financial policies; green finance; environmental policy stringency; composite index (search for similar items in EconPapers)
Date: 2026-07-08
Note: View the original document on HAL open archive server: https://unilim.hal.science/hal-05685020v1
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