The role of green bonds on industrial sustainability for achieving carbon neutrality: Evidence from the artificial neural network method

Abstract

This paper examines the role of green bonds on industrial sustainability in 15 Organisation for Economic Co-operation and Development (OECD) economies from 2010 to 2020. In this context, we utilise the Augmented Mean Group (AMG), the Artificial Neural Network (ANN), and the Kernel-based Regularised Least Squares (KRLS) methods. It is found that the ANN predicts the influence of green bonds on industrial sustainability more accurately than other methods. It is also observed that green bonds accelerate industrial sustainability in the OECD economies. The upper percentile group is primarily concerned with industrial sustainability rather than the lower- and middle percentile groups. Therefore, the OECD economies should emphasise the green bonds component in the green finance baskets to achieve carbon neutrality.