Fatih GÜZEL
Sustainability is a comprehensive development approach that seeks to preserve natural resources for future generations while accounting for the environmental and social impacts of economic activities. A central component of sustainable development is the design and implementation of effective strategies to achieve these objectives. In this context, the green economy has emerged as a transformative model that aims to reduce carbon emissions in production and consumption, prevent environmental degradation, and improve social welfare. Beyond serving as a pathway to sustainability, the green economy also functions as a catalyst for long-term economic growth. As an economic model that promotes balanced development across environmental, social, and economic dimensions, the green economy has increased the importance of green finance instruments and clean energy investments. At the same time, financial markets and investor behaviour are strongly influenced by risk perceptions, which are commonly measured through volatility indices reflecting market uncertainty. Against this background, this study examines the dynamic interactions between green economy indicators and financial risk measures over time. The analysis covers the period from March 2020 to June 2025, characterised by repeated episodes of elevated market risk, and employs daily data. Results from the TVP-VAR framework indicate that the S&P 500 ESG Index and VIX play dominant roles as key drivers in the system, with their spillover effects persisting well beyond the pandemic period. Additionally, green economy variables (ESG, clean energy, and green bonds) display strong interconnections and form a highly integrated cluster. In contrast, the MOVE Index shows the weakest spillover intensity and consistently acts as a pure net shock receiver.