# Russian Companies' Motivations for Making Green Investments
## 2 Research Concept and Literature Review
### Environmental Regulation and Public Funding  
Commitment to sustainable development goals is not enough even for large businesses. Both incentives coming from the global level and incentives coming from the state are needed, which can act in two ways. First, there are government support measures, or government subsidies. They are especially important for companies in developing countries, as well as for small and medium-sized businesses, which are even more sensitive to government support ([PERSON] et al., 2021). The governments of countries, in turn, are also interested in both achievingsustainable development goals and solving environmental and social problems. In this regard, the practice of implementing state programs, subsidizing, tax and other incentives linked to the achievement of national sustainable development goals is expanding ([PERSON] et al., 2016; [PERSON] et al., 2019; [PERSON] et al., 2013; [PERSON] et al., 2018; [PERSON], 2017; [PERSON] et al., 2020). All these measures reduce the R&D costs of companies in green technologies, and also reduce the cost of green investments. Current studies ([PERSON] et al., 2022) make a strong argument that, in the absence of government support, green innovation leads to an increased economic burden on companies, restrictions on the applied technologies and a significant decrease in the economic efficiency of companies. To receive a positive effect from green innovations, governments should strengthen their support, implement the correct macroeconomic regulation and form a legal system of innovation protection. In turn, companies should focus on modernization of production processes and at the same time actively accumulate technologies in order to neutralize the negative impact of green innovations on economic efficiency. The importance of public subsidy policy and information asymmetry for the effectiveness of green innovation stimulation is being actively studied ([PERSON] et al., 2022). Thus, the analysis of state support has received considerable attention. Second is the study of the role of environmental regulation as an incentive for businesses to make green investments. Here, we can find a wide range of studies that suggest to shift the focus from the study of traditional market behavior of companies to environmental regulation. According to research ([PERSON] et al., 2018), most enterprises do not see strategic prospects for initiating both environmental and green economy transformation. It has already been noted above that governments can stimulate companies by increasing their interest and willingness to make green investments. At the same time, it is widely believed that incentive policies must be backed by strict regulation to achieve the results for which those incentives are created. The hypothesis formulated by [PERSON] in 1991 provides a theoretical framework for environmental regulation. It argues that stringent environmental regulations can encourage companies to invest in innovations that help improve commercial competitiveness. These purposes are served by environmental regulation widely used around the world ([PERSON] et al., 2013; [PERSON] and [PERSON], 2018). As noted in a study ([PERSON] et al., 2019), environmental regulation makes companies understand the importance of green investments and directs them to actively participate in them. In addition, the rising cost of pollution creates incentives for companies to transform and modernize their operations. However, the impact of environmental regulation is not so clear-cut. Although there are studies that confirm the positive impact of environmental regulation on green investment in certain industries ([PERSON] and [PERSON], 2017; [PERSON] and [PERSON], 2016), other researchers reveal the negative impact of environmental regulation on investment, which is manifested in higher business costs and reduced flexibility ([PERSON] et al., 2018). This limits the company's investment opportunities.