Artificial Intelligence in Climate and Sustainable Finance: A Blessing or a Curse?

Abstract

While there are concerns regarding the sustainability of artificial intelligence (AI), it is a potential ally in the transition toward a greener future. It offers advanced tools for data analysis; risk modeling; and environmental, social, and governance (ESG) assessment. This study provides a systematic literature review and bibliometric analysis on how machine learning techniques are being applied to address climate-related financial challenges. The results reveal growing adoption of AI in areas such as emissions forecasting, green investment, and sustainability reporting. Based on the findings, there are several ongoing challenges related to data quality, interpretability, and algorithmic bias. While AI can enable a green transition, there are financial and ethical concerns that need to be addressed with robust governance, regulatory oversight, and institutional awareness to ensure that AI acts as a catalyst for financial stability and sustainable development.