Financial Engineering of Green Finance as an Element of Environmental Innovation Management

Abstract

Currently, the Ukrainian economy is beginning to implement the concept of «green» finance at the legislative level. But the minimum legal framework is already present to protect the environment of Ukrainians. The management of eco-innovation is essential, as most countries that negatively contribute to the sustainable environment are primarily countries with significant financial shortfalls. The article aims to determine the basic theoretical and practical principles of financial engineering of green finance as an element of environmental innovation management. European countries were selected to study the possibilities of financial engineering of green finance as an element of environmental innovation management. The study period is 2000-2020. The article analyzes and studies the main indicators of energy production and usage, adjusted savings, rent for using natural energy sources, Environmental Performance Index 2020, environmental health indicator, and other indicators for the studied countries. Regarding the possibilities of green financing in Ukraine, the existing normative legal acts are considered. For developing areas for improving the management of environmental innovations, this study was conducted in the following logical sequence: built a multifactor linear regression model net inflows of foreign direct investment; the influence of factors on the performance indicator is determined; the most influential factors for determining the directions of future improvement have been identified. The authors confirmed thAT the financial engineering of green finance is a tool that combines the world of finance, innovation, and business with environmental behavior. It is an activity area for many participants, including individual and business consumers, manufacturers, investors, and financial lenders. Unlike traditional financial activities, green finance focuses on environmental friendliness and pays more attention to the environment. Thus, investing in climate change and clean energy knowledge could better assess risk and return. Two important strategies in global sustainable development are energy efficiency and the development of renewable energy sources. As for the development of renewable energy industries, the main factor hindering the development of industrialization is the lack of capital and an effective financing mechanism.

Mapping Global Research on Green Energy and Green Investment: A Comprehensive Bibliometric Study

“…Energy-efficient technologies further optimize consumption, minimizing waste and environmental impact. Past studies [104][105][106] outline that the adoption of green technology aligns with the principles of sustainable development by promoting economic growth, social equity, and environmental responsibility. Investments in the research, development, and implementation of green technologies contribute to creating a more resilient and sustainable society.…”

Innovation and Management of Smart Transformation Global Energy Sector: Systematic Literature Review

“…Using a wide range of methods and tools for implementing sustainable development and renewable energy projects and stimulating CO2 emissions reduction characterizes the global transformational processes in the energy industry. The main ones include legislative norms and restrictions, supporting energy security (Kolosok et al, 2022), implementation of the environmental management system (Dobrowolski et al, 2022;Ziabina et al, 2022), use of emissions trading systems by countries (El Amri et al, 2020), fiscal and tax mechanisms and tools (Bardy et al, 2022;Khalatur et al, 2022), support of ecologically oriented innovative entrepreneurship (Saher et al, 2022); introduction of green investments and taxes (Pimonenko et al, 2018;Vostrykov et al, 2022), environmental standardization and certification; development of sustainable energy consumption (Yang et al, 2021), forming green awareness and sustainable society culture (Kyrychenko et al, 2021;Louis, 2022;Vakulenko et al, 2022). Thus, quite important to investigate the existing scientific environment of developing smart energy sector transformation.…”

Emerging new themes in green finance: a systematic literature review

“…Researchers have studied how these restrictions affect green finance's impact on technology. Studying how financial policies and regulatory frameworks interact has helped explain the complex dynamics affecting innovation in environmentally sensitive industries [11,29,54,84,120,126,132,151,152,174].…”