Green Finance and Sustainability Performance: The Moderating Role of Stakeholder Pressure

Aim: Green finance has been a growing trend as a financial instrument for promoting sustainability outcomes in the last two decades. Specifically, green finance services and products can promote SDGs of the companies as they bring about benefits for the environment and economy such as funding renewable energy, reducing emissions, and less contamination project investment. This study explores the effect of green finance on companies' economic and environmental sustainability performance, examining the primary and secondary stakeholder pressures as moderators due to its leverage effect on this relationship.Method: The study investigates 82 Turkish firms in different industries, with quantitative methods. The collected data was used in regression analysis for direct hypothesis and moderation analysis conducted through Hayes’ PROCESS macro.Results: The findings of the study reveals that green finance positively correlates with both environmental and economic performance of the firms; whereas primary stakeholders which are employees, customers and investors reinforce the relationship of green finance and economic sustainability. However, it was found that employee pressure, customer/investor pressures did not moderate the link of green-finance and environmental sustainability. In contrast, secondary stakeholder pressures that are media and NGOs were insignificant as a moderator in the relationship of green finance and firms economic and environmental sustainability performance. Conclusion: This study reveals that green finance has an effective role to promote sustainable development whereas stakeholder pressure remains as prominent factor for green finance strategy.