Abstract:

Green finance flows have grown significantly in recent years, yet large firms dominate this market. Micro, small, and medium-sized enterprises (MSMEs), which contribute significantly to greenhouse gas (GHG) emissions, are crucial for the transition to a sustainable economy. However, they face major challenges in accessing financing for sustainable investments. This presentation examines two key obstacles to scaling up green finance for MSMEs. First, it distinguishes between entity-based and activity-based green finance and argues that the latter is unsuitable for most MSME financial needs. Second, it highlights the cost of green due diligence. The presentation analyzes how pilot zones in China’s Zhejiang province are addressing these obstacles through innovative standards, financial products, and digital platforms, and draws policy recommendations to promote broader adoption of green MSME finance in China and other emerging markets and developing economies (EMDEs).

Bio:

Dr. Knaack is an Adjunct Professorial Lecturer at SIS. He also serves as a Research Fellow at the Center for Sustainable Finance, SOAS London and as an Associate at the Council on Economic Policies, a Swiss think tank. He has worked and published on inclusive green finance, the political economy of global banking regulation, and China’s role in global financial governance. He is the author of Global Financial Networked Governance: The Power of the Financial Stability Board and its Limits (Routledge, 2023), and co-author of Driving Digital Transformation: Lessons from Seven Developing Countries” (Oxford UP, 2023).