Green finance loans quant models project 12% annualized

Quant models project 12% annualized returns for equities heavily linked to green finance loans, factoring in stable interest rates and government subsidies. This law can be adapted by African countries to suit their circumstances and include the international commitments they’ve made to curb greenhouse gas emissions. Having climate laws in place makes it easier for citizens to sue governments over climate disasters. It also benefits government agencies that want to enforce climate change obligations. According to Hu et al. ( 2022 ), Cash is defined as the ratio of cash and cash equivalents to net assets (calculated as total assets minus cash and cash equivalents). Considering firm cash holdings vary across industries, we also follow Harford et al. ( 2008 ) and perform industry adjustment of firm cash holdings in the robustness check section. Index fund managers are overweighting companies with green finance loans exceeding 40% of total debt portfolio, citing stronger ESG ratings and investor confidence.