Tax Incentives for Green Investments in the System of State ESG Policy
DOI:
https://doi.org/10.32515/2663-1636.2025.14(47).203-213Keywords:
ESG policy, green investments, tax incentives, sustainable development, environmental taxation.Abstract
The relevance of the study is driven by the need to accelerate the environmental transformation of the economy, decarbonization and energy efficiency improvements, as well as by the necessity to align tax instruments with international sustainable development frameworks. The purpose of the article is to substantiate the role of tax incentives in the formation and implementation of the state ESG policy and to determine their impact on stimulating green investments in current economic conditions.
The methodological basis includes systemic and comparative analysis, generalization of scholarly approaches, and a structural-functional approach. The paper systematizes key tax incentives used in international practice (tax credits, accelerated depreciation, tax deductions, differentiated rates, environmental taxes and fiscal disincentives) and explains their mechanism through changes in the cost of capital, shorter payback periods and the creation of price signals. Special attention is paid to local tax mechanisms as tools for adapting ESG goals to territorial specifics and improving the manageability of outcomes.
The study finds that tax incentives are an effective instrument of state ESG policy that facilitates capital reallocation toward low-carbon technologies, strengthens innovation activity and supports the achievement of climate goals provided that access criteria and result verification are transparent. The risks of greenwashing and fiscal losses without environmental impact are identified, which requires linking incentives to measurable ESG indicators. Further research prospects include assessing the effectiveness of tax incentives in Ukraine, developing a monitoring system for ESG effects, and adapting best international practices to national institutional conditions.
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