Green Finance and its Impact on Debt Financing for a Sustainable Financial System

Abstract

In order to tackle the urgent problems brought forth by worries about the environment, Many countries have been proactively looking at green finance methods. Green finance is a key motivator that helps environmentally conscious businesses become more economically savvy by strategically pooling funds and regularly sharing critical information. The goal of this research is to improve knowledge of financial effects of green finance and debt financing. connection between corporate debt financing levels and green finance. Our results show that corporate debt financing levels are effectively reduced by green finance, and this conclusion holds up after passing a number of hurdles. According to additional research, green finance accomplishes this by lowering loan barriers and raising top level management pay. The influence of green finance is especially noticeable in Government Owned Corporations (GOC), areas with soft market, advanced construction areas and renewable energy sources. Furthermore, our study demonstrates that green finance has no distinct effect on current liabilities but greatly encourages the decrease of bonds and leasing when regulatory rules are strengthened. The research gives firms looking to achieve sustainable growth in dynamic contexts practical insights by tying debt management to broader corporate objectives.