Work

Environmental Project Financing and Insolvency Risk: Moderating Effects of Public Relations Function and Climate Policy Uncertainty

Year: 2026

Type: article

Abstract: Despite growing emphasis on financial firms’ engagement in environmental project financing (EPF), its impact on insolvency risk remains underexplored. Drawing on signaling theory, this study investigates how EPF influences financial institutions’ insolvency risk and examines the moderating roles of the existence of a public relations function and global climate policy uncertainty. By analyzing data of 291 financial firms from major developed economies over 2014–2023, this study finds that environmental project financing reduces insolvency risk. Furthermore, the presence of a public relations function strengthens this effect, while the rising global climate policy uncertainty weakens it. This study contributes to existing literature while offering both strategic insights and practical implications.

Source: Sustainability

DOI: 10.3390/su18105061

Authors: Faris Alzughaibi, Hamad Aldawsari

Institutions: Imam Mohammad ibn Saud Islamic University, Saudi Electronic University

Language: English

Topic: Sustainable Finance and Green Bonds

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Climate action, Peace, justice, and strong institutions

Open Access status: gold

Estimated APC paid: $2,896