Research on the mechanism of improving the energy-saving effect of green credit policy: green washing behavior and financial supervision

• Published in: Energy (Oxford) Vol. 327; p. 136485
• Main Authors: Pan, Ting, Lin, Boqiang
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.07.2025
• Subjects: China; credit; economic development; energy; Energy conservation; environmental law; ESG disclosure; Green credit; Greenwashing behavior; issues and policy; law enforcement; Weak financial regulation; China; Greenwashing behavior; ESG disclosure; Green credit; Weak financial regulation; Energy conservation
• ISSN: 0360-5442
• DOI: 10.1016/j.energy.2025.136485

In recent years, governments have made many efforts to achieve energy conservation goals. As the most important green financial instrument in China, how to improve the energy-saving effect of green credit (GC) policy has become a topic of great concern. Based on the urban panel data from 2013 to 2022, this paper uses two-stage least squares (2SLS) method to investigate the energy-saving effect of GC. The study found: (1) GC can effectively reduce urban energy consumption (EC). (2) There is a certain difference between the energy-saving effect of GC and the theoretical energy-saving effect disclosed by bank ESG, indicating that the actual energy-saving effect of GC is not as expected. (3) Mechanism analysis found that poor supervision of financial institutions and green washing behavior are the main reasons for reducing the energy-saving effect of GC. (4) Heterogeneity analysis found that by improving the level of financial development and environmental law enforcement, energy saving effects can be effectively improved. This paper provides an effective policy reference for promoting the development of GC and urban energy saving and consumption reduction. •Green credit can effectively promote urban energy conservation.•The actual energy savings of green credit are lower than banks' ESG expectations.•Weak financial supervision and green washing behavior are the main reasons.•There is heterogeneity in environmental control and financial development.