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The main goal of this paper is better understand the risk/return trade-off of investing in socially responsible investment funds (SRIF) and green investment funds (GIF).

To achieve our aim a green investment fund portfolio, a socially responsible investment portfolio and a conventional fund (CF) portfolio from the United States of America (USA) were selected to compare the efficiency of these three different portfolios, by using Value-Based Data Envelopment Analysis (DEA) methodology.

The results point out that SRIF and GIF are more efficient than CF. For five years, the CFs have not outperformed the GIF.

The results suggest that there is a growing awareness on the part of investors that sustainable companies are the companies that will allow a better quality of life and a more sustainable environment. It seems that somehow managers and investors are aware that the market will compensate them for thinking about a cleaner and more equitable world.

Socially responsible investment (SRI) has gained importance as about one out of eight US dollars is currently invested based on screening in the USA. However, European private investors are generally much more reluctant to invest in shares, and in Austria, only 7 percent of private households hold shares. There is nevertheless some interest in “green shares” (a sub‐class of SRI comprising shares that are screened for their least impact on the environment) as a representative survey recently exhibited that 8 percent of respondents were definitely interested in holding “green shares”. Econometric estimates of an empirical model explaining the respondents' willingness to invest in green shares showed that education, income, environmental awareness and the expected profit are the main explanatory variables. Based on these results, conclusions are drawn regarding marketing strategies for “green shares”. In particular, credibility both regarding financial aspects (competitive return), and environmental and social criteria have to be guaranteed to make more consumers interested in investing in green shares.

The objective is to develop an empirical model estimating the relationship and interaction amongst the factors affecting and enhancing green finance (GF) in developing economies like India.

Around nine growth-accelerating enablers of green financing were found through literature and unstructured interviews and analysed using the total interpretive structural modelling (TISM) method. The hierarchical link between each factor is established using TISM, and further to evaluate the driver-dependent relationship the Matriced’ Impacts Croises Appliquee Aaun Classement (MICMAC) approach is utilised.

The findings demonstrate an interrelationship between growth-accelerating factors, where the political environment and information and communication technology (ICT), have minimal dependency but a strong driving force. Political environment and ICT are found as strategic-level factors lying at the bottom of the model driving towards the dependent variables. The government should focus on enacting effective policies such as the green credit guarantee scheme and carbon credit and establishing a regulatory framework to enhance green financing.

This study examines the literature to generalise the findings and focus on the primary motivators for developing green financing. To increase green financial activity, practitioners must concentrate on aspects with significant driving forces. Furthermore, it makes organisations more profitable, efficient and competitive and promotes long-term growth.

The study is the first in the literature which identifies the growth-accelerating factors of green financing using the TISM and MICMAC-based hierarchical models.

The purpose of this study is to explore the inherent instability, if any, in the context of investment in stocks of environment friendly companies (or the “green” stocks) across the globe using the time series momentum (TSM) trading strategies.

Using the monthly data for the Green Indexes from the USA, the Europe and the Asia-Pacific region over 2003-2019, the authors construct TSM trading strategies to examine the efficacy of regional Green Indexes as well as two diversified global green portfolios to offer abnormal return to attract investors, particularly speculators. The authors’ explore further whether such strategies could operate as hedging instrument. A comparison of results across different regions helps the authors establish a universal nature, if any, of investment in green stocks.

The study finds that regional Green Indexes are unable to outperform the market. The global green portfolios perform significantly better. The inefficacy of the relevant time series momentum trading strategies rules out the possibility of speculations. However, the number of profitable momentum strategies is significantly higher for the diversified portfolios in longer run. The portfolios perform significantly better in outperforming the buy-only strategies as well. The stable market, escalated demand and the resulting increment in valuation of green stocks make adoption of greener technologies a choice rather than a forced obligation. This offers a solution to the problem of Tragedy of Common.

Sustained increase in investment in green stocks is crucial from an environment perspective, as better valuation of their stocks would indubitably convince firms to reduce their carbon footprints. A continued enthusiasm however would require investors’ faith in it. Presence of momentum profit would invite speculators leading to irrational exuberance, dwindling confidence and consequent fragility. Literature on green investment is relatively sparse with the threat of its vulnerability issues left largely unnoticed. The authors’ study fills these gaps.

This chapter stands for justification of growing demand for supporting new theoretical and methodological approaches in development of an actual green economy’s financial framework taking into consideration modern growing risks in the ecological, economic, social, and geopolitical environments. A notable increase in environmental expenditures of both national economies and international financial institutions is determined by the global state of the economy. The climate change has been caused by escalating the energy supply struggle, the nature exhaustion, and the need for providing balance to the market stating green economy regulators. The main aim of this chapter is to study the trends and the key state green finance regulation points. The research goal could be achieved through highlighting the nature of green finance and its framework; studying the concept of green finance and innovative financial tools’ development, providing green economy’s development; and spotting trends and imperatives of regional regulation of green finance. This chapter highlights the necessity for implementing complex systemic and methodologic approaches in making the green finance framework, summarizing leading practices in green funding and green economy’s funds raising, considering limits in green finance tools’ utilization in current conditions, strengthening the power of both federal and regional authorities in solving financial problems of energy saving, and extending the practices of companies and institutions’ green financial tools’ utilization. The necessity for a green sustainable development across the globe has driven this research to use different types of instruments to point out the benefits of such a development. In addition, green finance state regulation tools have been proposed.

This paper originally proposed the fuzzy option pricing method for green bonds. Based on the requirements of arbitrage equilibrium, this paper draws on Merton's corporate bond option pricing model.

Describing the asset value behavior of green bond issuing enterprises through diffusion-jump processes to reflect the uncertainty brought by carbon emission reduction policies and technologies, using approximation methods to get the analytical pricing formula and then, using a fuzzification technique of Choquet expectation under  λ-additive fuzzy measures after considering fuzzy factors, the paper provides fuzzy intervals for the parity coupon rates of green bonds with different subjective levels for investors.

The paper proposes and argues the classical and fuzzy option pricing methods in turn for both corporate ordinary bonds and green bonds, considering carbon risk or climate risk. It implements the scenario analysis varying with industry emission standards and discusses the sensitiveness of the related key parameters of the option.

The fuzzy option pricing for the green bonds provides the scope of the variable equilibrium values, operational theoretical supports and some policy implications of carbon reduction and promoting green funding.

The logic of introducing the fuzziness of the option pricing for the green bonds lies with considering the existence of fuzzy information about the project supported by the green bond and the subjectivity of investors and it also responds to changes in technological uncertainty and policy uncertainty in the process of “carbon peaking and carbon neutrality.”

Purpose – To discover how SRI develops in the Asian context.

Methodology/approach – Extended search of SRI initiatives analyzed with Scandinavian neo-institutional approach on how ideas travel and Buddhist Economy.

Findings – Chinese SRI-initiatives imitate western peers, but the imitation results in partial isomorphism that will probably have a weak influence on Chinese companies in ESG.

Research limitations/implications – A limitation of the study is a lack of information and transparency on Chinese homepages.

Practical implications – Chinese SRI is in an early state, and will need back-up and push to become active if it will be able to influence Chinese companies.

Social implications – It is important to have a critical stance, and not trusting optimistic statements about SRI in China as a mean to integrate ESG activities in Chinese companies.

Originality/value of chapter – One of the first overviews and critical analysis of SRI in China.

Socially responsible investing (SRI) funds depart from mainstream finance by incorporating environmental, social, and governance considerations, but their success varies across regions. By using a historical comparative case design, we identify an empirically puzzling phenomenon in China: despite an initially favorable resource environment and the presence of socially skilled institutional entrepreneurs, SRI wanes over time in Hong Kong but survives in Mainland China where initial resource endowments and actors’ social skills were inferior. By comparing four periods of SRI development, we reveal how state sustainable development policies, a change in the institutional context, led unintentionally to a shared orientation and a public pool of resources, which sustained the SRI niche. Our paper contributes to research on market emergence, institutional change, and cultural entrepreneurship.

This paper aims to systematically review all available evidence on the implications of sovereign wealth funds (SWFs) for various stakeholders (recipients of sovereign investment, home countries, which incorporate SWFs and the world at large) and offer future research directions.

A systematic literature review (SLR) technique is used to review 102 handpicked articles for the period 2005‐2019.

This review reveals that the literature on the impact of SWFs emerged only during the financial crisis of 2008–2011 and much of it is qualitative in nature. The literature is lopsidedly focused on the impact of SWFs on target firms and there has been a limited empirical investigation of the impact on other stakeholders. There is a lack of consensus in several areas, which calls for additional research. Few areas, which have not been addressed in the literature and can be taken up by future researchers include the impact of SWFs on macroeconomic fundamentals and stock markets of recipient countries, especially emerging economies; implications of SWFs for alternative asset classes; impact on the welfare of citizens and internationalization strategies of home countries; impact on initial public offerings and unlisted corporations; and impact on innovativeness, efficiency and corporate governance practices of target firms.

To the best of the authors’ knowledge, this is the first paper to use the SLR technique to review the literature on SWFs. It considers the impact of SWFs on all stakeholders and covers both qualitative and quantitative literature published over a long period of 2005‐2019. It also systematizes all available evidence on this theme and identifies important research gaps, which may be helpful for academicians, practitioners and policymakers.

The purpose of this paper is to explore the sustainable development strategy of green finance under the background of big data.

From the perspective of big data, this paper uses quantitative and qualitative analysis methods to judge the correlation among green finance, environmental supervision and financial supervision. Green finance gives the entropy method to calculate the score of green finance and environmental regulation, and establishes the spatial lag model under the double fixed effects of time and space.

Spatial autocorrelation test shows that economic spatial weight matrix has obvious spatial effect on green innovation. Through the model selection test, the space lag model with fixed time and space is selected. The regression coefficients of green finance, environmental regulation and their interaction are 0.1598, 0.0541 and 0.1763, respectively, which significantly promote green innovation. The regression coefficients of openness, higher education level and per capita GDP are 0.0361, 0.0819 and 0.0686, respectively, which can significantly promote green innovation.

In view of the current situation of large-scale application of big data technology in green innovation of domestic energy-saving and environmental protection enterprises, this paper establishes a fixed time lag evaluation model of green innovation. M-test statistics show that the original hypothesis with no obvious spatial effect is rejected.