Green Finance Research Around the World: A Review of Literature

Abstract

This paper reviews the existing research on green finance. It identifies the important themes in the green finance literature, particularly, the strategies to increase green financing; efforts to make green investment profitable; promoting green financing using technology and policy, the role of regulators and financial institutions in the green finance agenda, and the challenges of green financing. Several cross-country observations about the challenges of green finance and solutions to green finance issues are documented. The findings show that green finance has the potential to make a significant difference in the environment, society and for climate change mitigation, but many challenges abound such as the lack of awareness about green finance, inconsistent definitions of green finance, lack of policy coordination for green financing, inconsistent policies, and lack of profitable incentives to investors and financial institutions who are willing to invest in climate change mitigation.

Keywords: literature review, green finance, green investment, climate change, sustainable finance, green bonds, green banks, sustainable development goals, climate finance, environment, green loan, climate change mitigation. Paris Agreement, COP26.

JEL Classification: F64, F65, G21, Q01, Q56.