Prioritizing Green Finance Adoption Drivers: An Analytic Hierarchy Process Study

Author(s): Vaibhav Pandey, Tanishq Bhardwaj

Abstract:

Green finance is an important policy and market agenda in emerging economies, but commitment is not everywhere uniform, as institutional, informational and behavioural frictions all act in tandem. This paper focuses on the most important factors that contribute to green finance adoption in emergent markets by applying the Analytic Hierarchy Process (AHP). The following seven criteria are examined: disclosure quality and quality of corporate governance, climate-risk management, regulatory support, green innovation, investor awareness, green investment policies, and disclosure quality. Expert pairwise comparisons show that regulatory support is the largest influence, followed by ESG disclosure quality and climate-risk management. The results show that key enabling factors for green finance adoption are enabling regulatory frameworks and credible information systems. It suggests a policy agenda for regulators, financial institutions and corporate managers to speed up green finance rollout in emerging markets.

Keywords: Green Finance; Emerging Markets; AHP

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