Sustainable Finance: Funding Green Initiatives

Abstract

Banks can play a crucial role in the transition towards a green economy by financing environmentally sustainable initiatives and projects. Green financing instruments and their supportive regulatory frameworks have evolved. Green bonds are among the most important of these instruments. This study relies on a literature review and market reports to understand the impact of green financing on the financial sector and the environment. The key findings emphasize that green financing effectively directs funds to environmentally sustainable projects through green lending and refinancing mechanisms. Moreover, financial institutions engaged in green lending often experience enhanced reputation and increased customer loyalty.