This study examines the association between environmental sustainability factors and Domestic Credit to Private Sector (CPS) across selected EU countries, specifically focusing on Germany, France, Italy, Spain, Netherlands, Sweden, Finland, and Denmark. Using advanced econometric techniques, including MMQR, the study investigates how renewable energy consumption (REC), research and development expenditure (RDE), income inequality (GIN), and under-5 mortality (MUR) influence CPS. The results show that CPS is significantly impacted by REC and RDE, suggesting that financial access is closely tied to investments in renewable energy and technological innovation. Furthermore, CPS is negatively associated with income inequality, highlighting the potential of financial systems to reduce disparities and promote more inclusive economic growth. Although CPS is positively associated with forest area (FAR), the relationship with under-5 mortality is limited, implying that healthcare infrastructure and social policies play a more direct role in improving child health outcomes. These findings emphasize the importance of integrating green finance policies, enhancing RD investments, and addressing income inequality to foster long-term sustainable development and financial inclusion in EU countries.
Ning et al. (Fri,) studied this question.