The Role of Green Finance in Sustainable Productivity in Asia

Thematic Area: Macro, Trade & Economic Growth

Start Date: July 17, 2026

Green finance (GF) can act as a catalyst for both climate transition and productivity-enhancing structural change. Despite notable progress in renewable energy deployment, many countries remain dependent on carbon-intensive technologies, limiting improvements in sustainable productivity. By directing financial resources toward energy-efficient investments and low-carbon cleaner production technologies, GF can accelerate Asia’s transition to high-quality, sustainable development.

The role of GF in promoting sustainable productivity and specific transmission mechanisms through which it enhances energy efficiency and productivity remain underexplored. Existing literature primarily focuses on environmental outcomes of GF, particularly carbon emission reduction and renewable energy investment, while paying comparatively less attention to its effects on energy efficiency and productivity growth. This gap is particularly important in Asia, given the region’s high energy demand, rising emissions, and urgent need for productivity-led low-carbon development. In this context, this study investigates whether GF can catalyse the improvement of sustainable productivity in Asia.