Finance for a Greener future: Evolving the financial sector for ESG and sustainable corporate debt management

IF 6.3 2区经济学 Q1 BUSINESS, FINANCE

Borsa Istanbul Review Pub Date : 2025-03-01 DOI:10.1016/j.bir.2025.01.011

Bilal Haider Subhani , Shen Zunhuan , Muhammad Asif Khan

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Abstract

This study investigates the impact of Environmental, Social, and Governance (ESG) investments on corporate debt financing (CDF) in the BRICS (Brazil, Russia, India, China, and South Africa) economies throughout 2010 to 2022. A central aspect of this research is the moderating role of financial sector development (FSD), which potentially influences how ESG commitments affect corporate financing strategies in these rapidly evolving markets. The findings of two-step system Generalized Method of Moment indicate a negative correlation between ESG investments and CDF, suggesting that increased ESG commitments may initially restrict access to debt financing. Nonetheless, FSD serves as an important moderating variable, converting this adverse effect into a favorable one. A strong financial sector offers substantial funds under relaxed terms. In line with Porter's win-win hypothesis, the results indicate that sustainable practices can strengthen competitive advantage and financial performance, highlighting the importance of advancing FSD and incorporating ESG factors into corporate finance.

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来源期刊

Borsa Istanbul Review Multiple-

CiteScore

7.60

自引率

3.80%

发文量

130

审稿时长

26 days

期刊介绍： Peer Review under the responsibility of Borsa İstanbul Anonim Sirketi. Borsa İstanbul Review provides a scholarly platform for empirical financial studies including but not limited to financial markets and institutions, financial economics, investor behavior, financial centers and market structures, corporate finance, recent economic and financial trends. Micro and macro data applications and comparative studies are welcome. Country coverage includes advanced, emerging and developing economies. In particular, we would like to publish empirical papers with significant policy implications and encourage submissions in the following areas: Research Topics: • Investments and Portfolio Management • Behavioral Finance • Financial Markets and Institutions • Market Microstructure • Islamic Finance • Financial Risk Management • Valuation • Capital Markets Governance • Financial Regulations