Developing Green Finance Systems for Environmental Sustainability

Abstract

This paper examines the development of green finance systems to promote environmental sustainability. Green finance refers to financial investments flowing into sustainable development projects and initiatives. This includes financing environmentally friendly technologies, agriculture, transportation, infrastructure, and energy systems. With worsening climate change impacts and environmental degradation globally, developing supportive green finance ecosystems are essential for sustainability. However, significant gaps remain in mainstreaming green finance across banking systems and capital markets, especially in emerging economies. This study reviews relevant literature on green finance flows, instruments, institutions, and policy frameworks. It then sets out research questions and objectives to analyze challenges, opportunities, and innovations for developing green finance in different country contexts. A mixed methodology combines econometric analysis of green finance flows, qualitative case studies of policy frameworks in select countries, and a Delphi panel to develop expert recommendations on priority areas. The findings provide insights into tailoring context-specific green finance policy and regulatory systems for improved environmental sustainability. More concerted efforts are needed across public, private and non-profit spheres to grow green finance ecosystems and direct capital towards climate change mitigation and adaptation goals aligned with the Paris Agreement and Sustainable Development Goals.

Keywords: Green Finance, Sustainable Development, Environmental Sustainability, Climate Finance, Green Investment