Green Finance and Corporate Green Innovation : Evidence from the Equator Principles

Green financing policy plays a critical role in fighting against climate change by providing financial support to corporate’s green transition. Through the lens of the Equator Principles, adopted by financial institutions for managing environmental and social risks in funding projects, this paper examines whether green loans facilitate the innovation direction of corporate toward environmentally friendly technologies. We find that green loans are associated with higher ratios of environmental patents in total patents for firms in the pollution-intensive sectors than those in the non-pollution-intensive sectors. We also document the pivoting governance role of analysts’ attention and gender diversity in board members in pushing corporates with green loans to transit in a sustainable mode