Financing Sustainability: Assessing The Impact of Green Financial instruments on Development outcomes

Abstract

The time when all organizations around the world operated solely for financial gain is long past. Natural resource preservation and environmental protection are becoming increasingly important in all spheres of life today. Continuous research has being done worldwide to identify novel approaches for achieving sustainability. In order to safeguard the environment, mitigate the effects of climate change, invest in renewable energy sources, increase the amount of green space, and support other sustainable development initiatives, financial aid is known as "green finance." The goal of green financing is to enhance the amount of money flowing to priorities for sustainable development from the public, private, and not-for-profit sectors (from banking, microcredit, insurance, and investment). An important aspect of this is to increase accountability, better manage social and environmental risks, and seize opportunities that will improve the environment and provide a respectable rate of return. For people, businesses, and governments eager to pay and participate in environmentally friendly or low-carbon activities, green finance is a recent concept that provides an alternative funding channel. The distribution of funds for environmental preservation, the flow of funds to sustainable trade and investment activities, low-risk financing, and the creation of green investment and financing instruments are some advantages of green finance. This article examines the components of green financing, including green banking, green insurance, and green bonds. With the aid of current literature, it also assesses the prospects and difficulties for green finance in developing nations like India and makes an effort to offer fresh perspectives on green finance as a useful tool for sustainability.