Ecological Challenges and Green Investments: Is There a Relationship

This study investigates the relationship between ecological challenges and green investment in Russia using a cross-sectional dataset of 85 regions for the year 2022. The research is motivated by the pressing environmental issues faced by Russia, such as air and water pollution, deforestation, which have significant implications for public health and economic development. The study aims to contribute to the growing body of literature on sustainable finance and the role of environmental factors in investment decision-making with a focus on the Russian context. It is also contributes to the understanding of the drivers of green investment in Russia and provides empirical evidence on the link between environmental problems and sustainable finance. The research employs an Ordinary Least Squares (OLS) regression model to examine the impact of various ecological indicators, including air pollution, water pollution, and deforestation rates, on the level of green investment per capita across Russian regions. The findings suggest that air and water pollution have a positive and statistically significant relationship with green investment, indicating that regions with higher levels of pollution tend to attract more green investment per capita. However, the relationship between deforestation and green investment is found to be negative, implying that regions with higher rates of deforestation may be less attractive to green investors. The study also reveals that the relationship between ecological challenges and green investment varies across different geographical regions of Russia, with the Eastern regions exhibiting a stronger positive relationship compared to the Central region. The results of this study have important implications for policymakers and investors seeking to address environmental challenges and promote sustainable development in Russia.