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The Role of Green Finance in Fostering the Sustainability of the Economy and Renewable Energy Supply: Recent Issues and Challenges

Author

Listed:
  • Inese Mavlutova

    (Department of Economics and Finance, BA School of Business and Finance, LV-1013 Riga, Latvia)

  • Aivars Spilbergs

    (Department of Economics and Finance, BA School of Business and Finance, LV-1013 Riga, Latvia)

  • Atis Verdenhofs

    (Department of Economics and Finance, BA School of Business and Finance, LV-1013 Riga, Latvia)

  • Jekaterina Kuzmina

    (Department of Economics and Finance, BA School of Business and Finance, LV-1013 Riga, Latvia)

  • Ilja Arefjevs

    (Department of Economics and Finance, BA School of Business and Finance, LV-1013 Riga, Latvia)

  • Andris Natrins

    (Laboratory of Financial Services and Compliance, BA School of Business and Finance, LV-1013 Riga, Latvia)

Abstract

Nowadays, European countries, while implementing the goals of sustainable development, are trying to be energy secure by reducing energy consumption and switching to renewable energy sources; the issue of green bonds is essential in the financing of these projects. This study aims to investigate the current situation and trends in green finance, identifies its problems and challenges, as well as determines the importance of green bonds in sustainability in general and renewable energy supply in particular. The authors conducted a bibliometric analysis of green finance and renewable energy, followed by an extensive literature review identifying the benefits and challenges of green bond investments, continued with an empirical study that included hypothesis testing and the creation and analysis of the EU countries clusters, which have not been sufficiently studied to date. A study examining trends in green finance, identifying its benefits and challenges, found that green bond investments have a positive impact on carbon reduction and renewable energy supply in the EU OECD countries, and cluster analysis of the European OECD countries indicated a positive relationship between economic performance and overall ESG risk.

Suggested Citation

  • Inese Mavlutova & Aivars Spilbergs & Atis Verdenhofs & Jekaterina Kuzmina & Ilja Arefjevs & Andris Natrins, 2023. "The Role of Green Finance in Fostering the Sustainability of the Economy and Renewable Energy Supply: Recent Issues and Challenges," Energies, MDPI, vol. 16(23), pages 1-18, November.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:23:p:7712-:d:1285458
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    References listed on IDEAS

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