The agency view relates to the agency costs in government bureaucracy that may result in managerial inefficiency (Banerjee (1997), Hart, Shleifer and Vishny (1997)). Various studies have also been conducted to assess the impact of government ownership on banks.
Clear rules and regulations and reliable frameworks for green investment are therefore crucial, and that’s a task for policymakers. But financial market participants themselves are also called upon to ensure we have reliable market indices and market standards. Much has already been achieved in both areas. Market standards such as the Green Bond Principles already provide guidance for issuers, but also for investors.