Spillover dynamics in sustainable food ETF markets: Financialization and sustainable investment trends

• Study analyzes risk spillovers in sustainable food ETFs during 2021–2024 conflicts. • Substantial interconnectedness observed during the Israel-Palestine conflict. • SFRIZF1, SFRIZF2, and SFFOGB2 are significant risk transmitters in both conflicts. • SFFOOD1, SFFOGB1, SFFOOD2, and SFESSNR are risk receivers aiding diversification. • Offers insights on financialization and investment strategies in food ETFs during crises. This study evaluates the spillover dynamics and interconnectedness among sustainable food exchange-traded funds (ETFs) from January 2021 to November 2024, with a focus on financialization and sustainable investment trends during periods of geopolitical tension. This study uses the connectedness approach and found significantly higher interconnectedness during the Israel-Palestine conflict than the Russia-Ukraine conflict. Sustainable food (SFRIZF1-ETF, SFRIZF2-ETF, and SFFOGB2-ETF) consistently emerge as the dominant risk spillover transmitters, while sustainable food (SFFOOD1-ETF, SFFOGB1-ETF, SFFOOD2-ETF) markets are risk spillover receivers in the Israel-Palestine conflict. Conversely, sustainable food (SFRIZF1-ETF, SFFOGB2-ETF) markets function as net risk spillover transmitters, whereas sustainable food (SFESSNR-ETF and SFFOOD2-ETF) markets act as risk receivers in the Russia-Ukraine conflict, indicating their resilience to external shocks and utility for diversification. The results provide actionable insights for investors, speculators, and policymakers, emphasizing the financialization strategies based on sustainable food ETF market risk profiles and optimizing returns while mitigating geopolitical conflict risks.