Sustainable finance

Daniel Mertens and Natascha van der Zwan

Chapter 49 in Elgar Encyclopedia of Business and Government, 2026, pp 286-292 from Edward Elgar Publishing

Abstract: Sustainable finance is a core feature of contemporary global financial markets and their political regulation. The term usually refers to financial services and investment strategies that incorporate ESG (environmental, social, governance) criteria. It is associated with the belief that the financial sector can and should promote equitable growth and mitigate environmental risks. Whether seen as a multi-trillion USD market practice seeking gains from sustainability-linked financial products or as an emergent field of global and regional governance, sustainable finance has become an important vantage point from which to analyze state-market relations. Through sustainable finance, businesses and governments seek to redefine the common good in alignment with market-liberal paradigms. This entry covers the historical background of sustainable finance's rise to prominence; discusses the role of governments and business in sustainable finance; and draws attention to central issues and challenges for financial markets’ role in sustainability transitions.

Keywords: ESG; Investors; Market governance; Private finance; Public finance; Sustainability (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035307777
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