Green Finance: Catalyzing the Transition to a Sustainable Economy
Green finance refers to any structured financial activity that is created to ensure a better environmental outcome. It is a broad category encompassing investments, lending, and capital markets dedicated to funding projects and technologies that mitigate climate change, protect biodiversity, reduce pollution, and promote sustainable resource use.
At its core, green finance aims to align private and public capital flows with global sustainability goals, most notably the United Nations Sustainable Development Goals (SDGs) and the objectives of the Paris Agreement.
Green finance is fundamentally about risk management and opportunity creation. It works by internalizing environmental externalities, making the cost of pollution and resource depletion a financial consideration for investors and corporations.