The Nature of Global Green Finance Standards—Evolution, Differences, and Three Models

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Nedopil, Christoph
Dordi, Truzaar
Weber, Olaf
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2021
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(1) Background: Green finance standards have proliferated with much need for harmonization to accelerate global green financial flows. However, little is known on the nature of green finance standards that accelerates differentiation, rather than harmonization. Therefore, we embark to answer the question what the nature of green finance standards is and specifically how green finance standards have evolved in major economic systems driven by different actors and leading to differences and commonalities over time and environmental focus area. (2) Methods: To analyze the question, we build a model based on institutional and standards theory and apply text analysis and statistical methods to analyze 84 green finance standards issued from 1998 to 2020. (3) Results: we find clear evidence that green finance standards evolve depending on economic governance types (e.g., market-based, government-based and in weak institutional environments), environmental focus areas (e.g., pollution, climate, biodiversity) and depend on actors in government, intermediaries and developing financial institutions. We also show that this development has been dynamic over the last few decades. We further test and confirm three models of green finance standards: output-based, input-based and process standards that have evolved. With the findings, we aim to provide a better foundation for both research and policy in future green finance standard research, development and harmonization.

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Sustainability

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13

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7

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© 2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).

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Finance

Applied economics

Heterodox economics

Science & Technology

Life Sciences & Biomedicine

Green & Sustainable Science & Technology

Environmental Sciences

Environmental Studies

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Nedopil, C; Dordi, T; Weber, O, The Nature of Global Green Finance Standards—Evolution, Differences, and Three Models, Sustainability, 2021, 13 (7), pp. 3723

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