Green Finance as a Strategic Tool for Environmental Compliance and Sustainable Competitiveness
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Abstract
Research on green finance has largely treated environmental compliance and sustainable competitiveness as separate outcomes, while much of the firm-level evidence remains concentrated in China. This study integrates these strands by examining green finance as both a financing mechanism and a strategic governance tool. Using a documentary and systematic review design grounded in the Natural Resource-Based View, the study synthesised 20 unique empirical studies drawn from an auditable pool of 26 scholarly and policy sources. The evidence was assessed through narrative synthesis and descriptive percentage classification. For environmental compliance, 70.00% of the coded evidence reported positive effects, 20.00% mixed or conditional effects, and 10.00% limiting effects. For sustainable competitiveness, 66.67% reported positive effects, 25.00% mixed, delayed, or conditional effects, and 8.33% weak or inconsistent financial effects. Across the reviewed studies, green finance reduced financing constraints, supported green innovation and operational efficiency, strengthened reputation, and improved access to sustainability-oriented markets. Evidence from Nigeria, Ghana, South Africa, and other emerging economies also showed that outcomes depend on governance quality, digital capability, firm readiness, and institutional support. Overall, green finance is most effective when used as a governance and capability-building instrument rather than merely as a source of capital. Its benefits are strongest where targets are measurable, disclosure is credible, verification is reliable, and products are accessible to smaller firms. The study links these findings to SDGs 7, 8, 9, 12, and 13 and highlights their relevance for emerging-economy policy and firm strategy.
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