What is it about?
This study examines the challenges of green financing in India using Interpretive Structural Modeling (ISM) to identify hierarchical relationships among key factors. The research identifies regulatory deficiencies as the foundational barrier, cascading into secondary challenges such as data gaps, low investor awareness, high costs, and limited access to financial products. These issues, compounded by greenwashing, hinder transparency and the accurate measurement of environmental returns. The structural modeling approach provides a novel contribution by revealing how these interconnected challenges stem from weak regulatory frameworks—an insight not previously mapped in Indian green finance literature. The study underscores the importance of strong legal systems, standardized metrics, technological advancement, and policy harmonization to build investor trust and improve accessibility. For scalable and effective solutions, future research should explore the integration of emerging technologies and conduct cross-regional comparative analysis.
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Why is it important?
This study is important as it reveals the foundational role of regulatory deficiencies in hindering green finance in India. By using Interpretive Structural Modeling (ISM), it uncovers how weak regulations trigger a cascade of challenges—such as data gaps, low awareness, high costs, and greenwashing—that limit investment and transparency. The insights offer a structured understanding of systemic barriers not previously mapped in Indian literature. Strengthening legal frameworks, standardizing metrics, and leveraging technology can build investor trust and improve financial accessibility. This research lays the groundwork for future policy reforms and innovations needed to scale sustainable finance in India and similar economies.
Perspectives
From a broader perspective, this study offers valuable insights into the systemic barriers facing green finance in India. By highlighting regulatory weaknesses as the root cause, it shifts the focus from isolated challenges to a more interconnected understanding of the green finance ecosystem. This approach enables policymakers, investors, and institutions to prioritize structural reforms and adopt more targeted interventions. The study also emphasizes the need for standardized metrics, legal clarity, and technological integration to enhance transparency and investor confidence. Its methodological innovation through ISM provides a replicable model for other regions, making it a significant contribution to global sustainable finance discourse.
Dr. Hans Kaushik
Dayalbagh Educational Institute
Read the Original
This page is a summary of: Examining Interactions among Challenges of Green Financing in India, Ecological Civilization, January 2025, SCIE Publishing Limited,
DOI: 10.70322/ecolciviliz.2025.10012.
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