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    Analysis of the dynamics of carbon pricing: the role of speculation in the Emissions Trading System (ETS) = Ukuhlaziywa kokushukumisa kwenani le-carbon: iqhaza elidlalwa ukuqagela endleleni yokuhweba ekhiphayo (ETS).
    (2024) Isah, Kazeem Ovanero.; Adelakun, Ojo Johnson.
    Purpose – To align with the global goal of keeping the temperature rise to well below 2 degrees Celsius, a market-based policy initiative, the "Emissions Trading System (ETS)," is to mitigate climate change. However, the carbon allowances traded at the ETS are held and traded not only by polluting companies, but also emissions non-compliance financial firms. These financial firms though engage in speculation, there has not been any compelling evidence of the extent to which speculation matters in carbon pricing. To bridge this gap, this study is premised on three separate but related essays to: (i) determine the accurate framework for modelling the dynamics of carbon pricing; (ii) determine the extent to which speculation matters in the predictability of carbon pricing; and (iii) determine whether speculation undermines or benefits the emission reduction effect of carbon pricing. Methodology –We employ the GARCH-MIDAS econometric technique to test the hypothesis that an all-inclusive framework that reflects the emission compliance and emissions noncompliance dynamics of the ETS is the most accurate approach to modeling carbon prices. We also employ some verifiable econometric procedures to arrive at the Feasible Quasi Generalised Least Square (FQGLS) as the most appropriate estimator to address some of the biases in the predictability of carbon prices. Findings – A modeling framework that captures both emissions compliance and emissions noncompliance dynamics of the ETS is the most accurate to modeling carbon prices. We find that speculation is a good predictor of carbon prices. We find that both emission compliance and emission non-compliance dynamics of the carbon market matter for the emissions reduction effect of the ETS and for enhancing the accuracy of climate change forecasts. Research Contribution – The literature on emission trading has continued to ignore the speculative behavior of the emissions non-compliance firms in the ETS. As a result, we construct a composite news-based speculation index to simultaneously capture the emissions compliance and emissions non-compliance dynamics of the ETS in a single framework. We provide the literature with a data-driven framework upon which the predictive power of speculation is examined both in the predictability of carbon pricing and in the forecast of emission reductions. Iqoqa. Inhloso – Ukuqondanisa izinjongo zomhlaba zokugcinwa kwezinga lokushisa lingaphansi kuka-2 degrees Celsius, ukusungula inqubomgomo eyame ezimaketheni, Indlela Yokuhweba Ekhiphayo "Emissions Trading System (ETS)," ngenhloso yokulungisa ukuguquguquka kwesimo seZulu. Yize-kunjalo, inani lecarbon elihwetshiwe ku-ETS ligcinwa liphinde lihwetshwe yizinkampani ezenza ukungcola kodwa hhayi zona kuphela kepha nezinkampani zezomnotho ezingathobeli ukukhipha okungcolisayo. Le zinkampani zezomnotho yize zisebenza ngokuqagula, bebungakabibikho ubufakazi obuqandula ikhanda ngendlela abaqagula ngayo inani le-carbon. Ukuvala leli gebe, lolu cwaningo lweyame kuma-eseyi amathathu ahlukene kepha ahlobene nolokhu: (i) ukuqonda uhlaka oluqondile ukwenza imodeli yokwehluka kwenani lecarbon; (ii) ukuqonda ukuqagulwa nokulinganisa amanani ecarbon; kanye (iii) nokuqonda ukuthi ukuqagula kucekela phansi noma kuyalekelela ekunciphiseni ukuphipha ukugcola ngokukhipha amanini ecarbon. Indlela yocwaningo–Kusetshenziswe iGARCH-MIDAS econometric technique ukuhlola isihlawumbiselo sohlaka olufaka konke oluveza okusemthethweni ngokuphipha ukugcola kanye nokungalandeli umthetho wokukhishwa kokungcola okunhlonhlobo nge-ETS okuyiyona ndlela eqondile ukumodela inani le-carbon. Kuphinde kwasebenza izindlela eziqinisekisiwe ze-econometric procedures ukufinyelela kwiFeasible Quasi Generalised Least Square (FQGLS) njengesiqaguli esinembayo ukuxazulula okunye ukwenzelela ekuguleleni kwenani lecarbon. Imiphumela – Uhlaka lokumodela oluqukethe ukulandelwa komthetho wokukhishwa kokungcola kanye nokungalandelwa komthetho wokukhishwa kokungcola okunhlobonhlobo ku-ETS iyona ekahle kakhulu ukumodela amanani ecarbon. Kutholakale ukuthi ukuqagula yikho okuyisiqaguli esihle kumanani ecarbon. Kutholakale nokuthi kokubili ukulandelwa komthetho nokungalandelwa kwawo kokukhishwa kokungcola okunhlobonhlobo ezimaketheni ze-carbon ukwehlisa kokukhishwa kokungcola kumthelela weETS kanye nokuthuthukisa ukuqonda kokuqagulwa ngokuguquguquka kwesimo seZulu. Umnikelo wocwaningo –Imibhalo ngokuhweba ngokukhishwa kokungcola kuveza ukuqhubeka kokushawa indiva kokungalandelwa kwemithetho yokukhishwa kokungcola ezinkampanini ze-ETS. Kungakho-ke kugcine sekwakhiwa uhlobo olusha oluqondile lokuqagula ukuqoqa ngasikhathi sinye nokukulandelwa nokungalandelwa komthetho wokukhishwa kokungcola okunhlonhlonhlobo kwe-RTS ohlakeni olulodwa. Kube sekubakhona nemibhalo enemininingo elawula uhlaka olunamandla okuqagula, kuhlole ukuqagula kanye namanani e-carbon ukwehlisa ukuqagula kokukhishwa kokungcola.
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    Investor sentiments and performance of ESG funds in emerging and developed markets.
    (2024) Aboluwodi , Damilola Muyiwa.; Muzindutsi , Paul-Francois.; Nomlala , Bomi Cyril.
    The niche of sustainable finance, despite relatively new, has become a mainstay in the discourse of global finance. Whilst there are multiple factors driving the research interest in this space, chief amongst this, is the purported consequentiality of sustainability concerns that is relatable to even people lacking financial knowledge. In this light, this study sought to examine the impact of investor sentiments on Environmental, Social and Governance (ESG) index returns and risk performance under bull and bear market conditions in emerging (BRICS) and developed (G7) markets. The study further examined the nature of volatility and the impact of investor sentiments, as well as the return and volatility spillovers among countries within and across the emerging and developed markets. Using the Morgan Stanley Composite Index (MSCI) ESG data from 01/10 /2007 to 31/12/2022, a composite investor sentiments (CIS) index was constructed using eight fundamental market sentiment proxies, which were further included in the empirical models employed. Firstly, employing a Markov Regime Switching Model, the study examined the impact of investor sentiment on ESG performance in bull and bear market conditions. Herein, findings of the study noted that investor sentiment impacts the performance of ESG funds in emerging markets more than in developed markets regardless of market conditions. More so, whilst the study established ESG performance varies across bull and bear conditions, from the standpoint of ESG return performance, the study established that emerging ESG markets performed better in bull market condition and developed ESG markets performed better in bear market condition. Conversely, from the dimension of ESG volatility performance, the study established that developed markets exhibited a higher volatility in bull market condition and emerging markets exhibited higher volatility in bear market condition. Secondly, adopting GARCH models such as the EGARCH, GJR-GARCH and GARCH-X models, the study evaluated the nature of volatility and the influence of investor sentiments on volatility of ESG funds in emerging and developed markets. Within this context, the research findings based on the mean equation coefficient suggest that there is a weak-form of market efficiency across emerging and developed ESG market blocs except the USA ESG market. Also, the study empirically established that based on the leverage effect, negative shocks (bad news) are more likely to increase the volatility of ESG returns than positive shocks (good news) in both emerging and developed market blocs. Additionally, the study established that although investor sentiments impacts the volatility of ESG returns regardless of market characterizations, emerging ESG markets are extensively more susceptible to investor sentiments than developed ESG markets. Thirdly, utilizing a Multivariate GARCH models such as the DCC-VARMA-AGARCH, DCCVARMA- GARCH and the CCC-VARMA-AGARCH models, the study explored the nature of return and volatility spillovers dynamics within and across emerging and developed ESG markets. In this regard, findings of the study evidenced that although there is evidence of return spillovers across emerging and developed ESG markets, ESG returns in emerging markets are likely to be adversely affected by the spillovers from developed markets. Also, the study also established that although there is evidence of return spillovers across emerging and developed markets, the developed ESG market bloc especially the USA and the EU, have significant volatility spillover influence on the volatility of emerging ESG markets. In addition to this, the findings of the study further established that negative shocks (bad news) from developed markets increases the volatility spillovers of ESG returns in emerging markets by more than positive shocks (good news), not viceversa. In general, these findings accentuate diverse implications from the standpoint of several finance theories. Most evidently, from the perspective of the Efficient Market Hypothesis (EMH) theory, the findings challenge the notion of market efficiency by suggesting that investor sentiment can influence the performance of ESG funds, indicating potential inefficiencies in pricing. Likewise, from the standpoint of behavioral finance theory, the findings emphasize the importance of psychological factors in investment decision-making, highlighting how investor sentiment drives market outcomes. Lastly, the Adaptive Market Hypothesis (AMH) theory acknowledges the dynamic nature of markets and the role of investor behavior in shaping them, suggesting that the impact of sentiment on ESG fund performance is adaptive to market conditions. This research contributes to the finance literatures in the sphere of sustainable finance and ESG investing. In particular, this study offers novel critical contributions on how investor sentiment is intertwined with the discourse of ESG performance, risk and risk spillovers across market conditions and characterizations. Given these empirical revelations, this study recommends that individual and institutional stakeholders keen on sustainability concerns and ESG investing should consider the influence of market conditions on ESG performance, the distinctiveness of ESG market characterizations with regards to returns and risk spillovers, the subsisting relationships among ESG markets as well as the overarching impact of investor sentiments on ESG performance and volatility. Thus, the empirical establishments of this research are relevant for investment decision making, risk management, global financial markets and development of sustainable finance theory.
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    The perceived impact of green microfinance on the sustainability of small, micro, and medium-sized enterprises in Ghana.
    (2024) Berko, Daniel.; Rajaram, Rajendra.
    The study aimed to analyse the perceived impact of green microfinance on the sustainability of micro, small, and medium-sized enterprises (MSMEs) in the Sunyani and Techiman municipalities in Ghana. The elements of green microfinance used in this study were green credit, micro-savings, microinsurance, and green education. The study was conducted among MSME clients of rural and community banks and credit unions. The study focused on a target population of 5303 MSMEs. The study’s sample size was 358 MSMEs, comprising 71 in the agriculture sector, 189 in the service sector, 79 in the manufacturing sector, 13 in construction, and 6 in other sectors. The research employed a quantitative research method to match the study’s objectives with its guiding philosophy. Data was collected in person from 358 respondents who were chosen from the MSMEs in the Sunyani and Techiman Municipalities of Ghana using a stratified systematic sampling technique. The proposed research hypotheses were analysed using Smart PLS-SEM. The results revealed a positive and significant relationship between green credit, green education, micro-savings, and environmental performance. The study also demonstrated that green education, micro-savings, and microinsurance have a positive and significant influence on financial performance. Moreover, the study found that green credit and education have a positive and significant relationship with innovativeness. Nevertheless, the analysis revealed no discernible correlation between green credit and financial and social performance, nor between green education and social performance. The study makes a substantial contribution to the existing body of empirical literature on green microfinance. It would also assist the government, Bank of Ghana, microfinance institutions (MFIs) and other policymakers in developing effective policies and strategies to address environmental issues arising from MSMEs. Thus, the study recommends that MFIs and stakeholder institutions improve environmental awareness in their services. The government should create a dedicated green fund that MFIs could access at a favourable interest rate to lend to entrepreneurs for green activities. It is also recommended that the Bank of Ghana revises its Environmental and Social Risk Management policy framework for green financing to give considerable attention to microfinance institutions.