Global Standards and Local Ambitions across Green Taxonomies: Climate change mitigation from the European Union to South Africa

with Andreas Hoepner, Ifigenia Paliampelou, Anh Vu and Dariusz Wojcik

Green finance taxonomy standards have emerged to provide clarity on what economic activities can be considered green for the purpose of attracting investment and counteracting greenwashing. This paper analyses the determinants of the climate change mitigation ambition level of the South African green finance taxonomy in comparison to the EU’s own taxonomy, given (i) the interplay between EU’s and RSA’s production and financial networks, and (ii) South Africa’s willingness to attract European funding for sustainable development. We find that EU private investor bond holdings across different South African sectors and economic activities and South African commodity exports to the EU are positively related with a higher level of greenness of the economic activities in the South African taxonomy. In contrast, financing from European government-owned development banks seems to lower the ambition level of the South African taxonomy compared to the EU’s taxonomy, particularly in the sectors which have historically depended on development finance. Our results also suggest that Johannesburg as South Africa’s financial hub and, to a lesser extent, Cape Town, appear to have more influence over the national green finance taxonomy development than other areas.

Does Gender Affect the Investment Strategy of Private Equity and Venture Capital Firms?

with Pia Helbing, Andreas Hoepner, Xi Hu and Beiyun Xiao

This study investigates the effects of gender on the investment strategies of private equity (PE) and venture capital (VC) firms, with the impact investing as the proxy for investment strategy. Utilizing a large dataset from 2010 to 2021, we find that women-founded PE/VC firms are more likely to adopt impact investing strategies and engage in impact investments, although gender effects on syndicate-level impact investments appear limited. Further analysis reveals a synergistic effect between PE/VC firm characteristics and institutional factors, that the gender effects on PE/VC impact investments are more pronounced in regions with higher gender equality. Our results, robust after addressing concerns of sample selection and endogeneity, contribute to the literature on entrepreneurial finance and institutions. We underscore the significant effects of women founders on PE/VC investment strategies and the critical role of institutional context in shaping gender dynamics within the PE/VC sectors.

On the Origin of Green Finance Policies

with Declan French, Andreas Hoepner, Lisa Sheenan and Anh Vu

Worldwide green finance policies by type enacted by regulators. Data source: Green Finance Measures Database

We study the emergence of green finance policies and some of the likely drivers which drove policymakers worldwide to enact different voluntary or mandatory policies. Using survival analysis, or in other words, modelling the time it takes for a regulator to enact a first-of-a-kind green finance policy, we find that social movement pressure, proxied by fossil fuel divestment, is statistically linked with the initial issuance of green finance policies. Moreover, countries with high state fossil fuel subsidies tend to be the first in issuing green finance policies, potentially as an alternative to traditional environmental policies. By investigating why governments and central banks issue green finance policies, we emphasise the drivers of these policies in recent years and shed light on the socioeconomic processes at play in transforming economies towards lower greenhouse gas emissions.

Work in progress - available upon request:

On Green Finance Policies and Responsible Investment

• The Impact of the EU Carbon Border Adjustment Mechanism: Evidence from EU - India Steel Trade. with Luca Taschini and Gian-Luca Vritz

• The Sustainability Impact of the EU Green State Aid. with Lucia Alessi, Giusepinna Cannas and Andreas Hoepner

• The Value of Nature Protection: Evidence from Project Finance. with Andreas Hoepner, Mohamad Faour, Khaladdin Rzayev and Ruoran Zhao

• Pricing Biodiversity Risk: Evidence from Bank Loans. with Biganzoli Frabrizio, Andrej Ceglar,Dominik Hirschbuhl,Chiara Lelli, Marco Petracco, Yifan Qi, Ruoran Zhao

• Ethics of Coal Retirement. with Mtthew Brander, August Maretno Harjoto and Jiwon Kim

• Fossil Fuels - Are They Worth the Downside Risk? with Lucia Alessi and Andreas Hoepner

• Spatial Dynamic of Infrastructure Development - with Xi Hu, Jim Hall, Jiashun Huang, Raghav Pant, Jianxiong Sheng and Ruoran Zhao

• Private Equity Ownership in Fossil Fuel and Sustainable Energy. with Dyaran Bansraj, Khaladdin Rzayev and Francisco Urzua

On Sustainability Accounting

• Avoided Emissions. with Matthew Brander and Michelle O'Keefe

• The Impacts of Mining on Deforestation and Protected Areas. with Claudio Rizzi and Ruoran Zhao

• Claiming Legitimacy in Impact Investing. with Yanan Lin, Andreas Hoepner and Fabiola Schneider

On Sustainable and (Fin)tech Entrepreneurship

• Spare me the Sermon, Show me the Money: Decoupling Cleantech Venture Moral and Pragmatic Legitimacy. with Claudia Doblinger, Dominik Fischer, Xi Hu, Jeffrey York and Siddarth Vedula.

• Stealth, Hype and Entrepreneurshp. with Beiyun Xiao and Ruoran Zhao

• Fintech Partnerships. with Pia Helbing, Vladimir Pazitka, Beiyun Xiao and Dariusz Wojcik