Green finance for energy transition, climate action and sustainable development: overview of concepts, applications, implementation and challenges

Abstract

The solutions to mankind's greatest problems today lie in the simultaneous development, adoption and deployment of a combination of technological, socio-political, cultural and financial initiatives and mechanisms. The present work serves as a brief compilation of concepts and information pertaining to the broad domain of green finance, particularly for a readership with non-financial background. Green finance indicates the deployment of private and public capital towards projects that not only prevent environmental degradation and related impacts such as climate change and air pollution but also generate a host of social benefits and adequate financial returns for the investors. Thus, green finance embodies several cross-cutting concepts. The various global events leading to the development of the current state of green finance, the typical forms and instruments involved, the regulatory framework and issuance process for these instruments and the various international agencies and organizations developing and making use of green finance schemes for identified beneficiary projects are briefly described in this work. Financial disclosures and the role of regulators and investors in strengthening green finance schemes are discussed, along with a summary of the current thought leadership and current academic research in this domain. The challenges in green finance are also enumerated and a few perspectives for the future are presented.