Impact of Green Financing on Climate Action (CA, SDG 13): Moderating Role of Financial Literacy

Abstract

Green financing is also generally accepted as a necessary tool of financing the climate mitigation and adaptive measures in accordance with the Sustainable Development Goal 13 (Climate Action). Nevertheless, there is a lack of knowledge regarding the conditional role of individual financial literacy in improving this relationship. This paper will explore how green financing affects SDG 13 (Climate Action) and explore how financial literacy can moderate this effect. Following a positivist philosophy and deductive approach, this survey was a cross-sectional survey, which collected information about 274 employees of Habib Bank Limited (HBL) located in Khyber Pakhtunkhwa, Pakistan. Regression and moderation analysis in SPSS were used to perform the analysis of data. The findings affirm the high and significant positive relation between green financing and Climate Action ( =.545, p <.001). The financial literacy moderating effect, however, was significant (interaction term p =.0882), which is tentative and positive, but which is not significant enough to reach the traditional mark of statistical significance. It implies that although increased financial literacy can have a small positive effect on the connection between green financing and climate action results, it cannot be definitively demonstrated as a crucial moderator in this sample. The study not only endorses the direct role of green financing in the progression of the climate objectives but also offers qualified data to policy makers on possible complementary advantages of improving financial literacy to facilitate the strategies of climate finance. 

Keywords: Green Financing, Climate Action, SDG 13, Financial Literacy, Moderation Analysis, Sustainable Finance.