| Keywords [eng] |
Sustainable investment, climate change mitigation, renewable energy, green innovation, governance, policy uncertainty, high-income countries, panel data analysis, ESG finance, sustainability strategy. |
| Abstract [eng] |
This paper research is based on the topic of sustainable investment as a means of enhancing the prevention of climate change by using renewable energy in highly industrialized nations. The study uses Stakeholder Theory, Legitimacy Theory, and Signaling Theory to understand how the quality of governance, policy uncertainty, and sustainable investment are moderated by green innovation to reduce the effectiveness of sustainable investment. Based on secondary panel data (1990- 2023) on ten major highly-income economies, including Australia, Canada, France, Germany, Ireland, Italy, New Zealand, Spain, the United Kingdom and the United States, the study uses fixed-effects, random- effects and pooled OLS regression models to determine the major contributors to uptake of renewable energy. The results indicate that sustainable investment does not largely increase the consumption of renewable energy, but the situation factors greatly contribute towards its positive effect. Namely, green innovation has a positive moderating effect on the relationship between investment and impact, whereas the moderating role of policy uncertainty is negative. Besides, the quality of governance is a major moderating factor, which determines the efficiency of the money channeling into sustainable infrastructure. Westerlund cointegration test also supports the assumption that there are long-run relationships between the main variables. These findings indicate that climate mitigation can only be effective with financial contributions but also with well-organized institutions, uniform policy structures and availability of technology. The paper has an impact to both the theory and policy by providing an illusion on the optimalization of environmental finance to act upon climate change. It presents two implications that are practical to policy makers, investors, and sustainability planners who are trying to align green finance to the aim of climate in developed economies. Keywords: Sustainable investment, climate change mitigation, renewable energy, green innovation, governance, policy uncertainty, high-income countries, panel data analysis, ESG finance, sustainability strategy. |
