Green finance and renewable energy move in sync when uncertainty strikes

A new study in Humanities and Social Sciences Communications finds that green financial markets and renewable energy assets often move together when uncertainty hits. Researchers Windijarto and Muzammal Ilyas Sindhu at Universitas Airlangga in Surabaya analyzed how uncertainty affects co-movement between green and conventional assets using wavelet coherence, a technique that looks at synchronization across different time cycles rather than one overall correlation. Using monthly data from November 2023 to October 2026, they examined indices including world energy, clean energy equities, ESG equity markets and bond markets, alongside energy and ESG uncertainty indicators. The study suggests sustainable investing may diversify risk more in some periods than others.