Green Financing and Sustainability of Food and Beverage Manufacturers in Nairobi City County, Kenya

Abstract

Kenya's food and beverage manufacturing sector faces intense pressure to adopt sustainable practices amid climate change, stringent environmental regulations, and growing consumer demand for eco-conscious products. Green financing, including green investment funding, green credit availability, and sustainability-linked incentives, offers a vital pathway for firms to transition to environmentally responsible operations. However, its adoption remains limited in Kenya's manufacturing landscape, particularly in Nairobi City County, where empirical evidence on its impact on firm-level sustainability outcomes is scarce. This study examined the effects of green investment funding, green credit availability, and green financing incentives on the sustainability of food and beverage manufacturers in Nairobi City County, Kenya. It also assessed whether innovative capability mediates this relationship. Grounded in Shared Value Creation, Dynamic Capabilities, and Transition Theory, the study adopted a quantitative correlational design, targeting 125 key personnel from firms with established operational maturity, sufficient workforce size, and access to green finance initiatives. A stratified sample of 95 respondents completed structured questionnaires. Data were analyzed using descriptive statistics, multiple linear regression, and Baron and Kenny's mediation approach. Results showed that green investment funding had the strongest positive effect on sustainability (β = 0.461, p < .001), followed by green credit availability (β = 0.305, p = .001), while green financing incentives had a weaker but significant effect (β = 0.235, p = .010). Innovative capability did not mediate the relationship but independently enhanced sustainability outcomes (β = 0.284, p = .001). These findings highlight the critical role of strategic green investments and accessible credit in driving sustainability. The study recommends that manufacturers prioritize eco-friendly technologies like renewable energy and water-saving systems, policymakers streamline incentive frameworks and develop tailored financial products, and researchers pursue qualitative and longitudinal studies to deepen insights into green financing dynamics, thereby advancing Kenya's sustainable industrialization objectives aligned with global climate goals.