Sustainable Finance: Past, Present, and the Future

Shweta Dwivedi (), Apoorva Pandey () and Amin Jan ()
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Shweta Dwivedi: Indian Institute of Management Bodh Gaya
Apoorva Pandey: Indian Institute of Management Kashipur
Amin Jan: Wenzhou-Kean University

Chapter Chapter 2 in Green Horizons, 2025, pp 21-36 from Springer

Abstract: Abstract Merely discussing sustainability doesn't lead to it. It requires an action plan that effectively implements sustainable investment, primarily focusing on environmental, social, and governance issues. Especially when the world is witnessing drastic climate change effects. The Paris Agreement 2015 also stresses the serious concern for sustainable finance, highlighting the substantial gap between developed and developing nations in terms of sustainable investment. Considering the importance of sustainability, this study emphasizes the critical need for sustainable finance by tracing its history and proposing solutions for a sustainable future. It discussed how the need for sustainable finance arose due to the failure of conventional financial models to solve contemporary issues such as climate change and social issues. This leads to steps toward the development of sustainable finance, such as socially responsible financing, ethical financing, green financing, climate finance, and carbon pricing. The study found that environmental, social, and governance factors gained attention with time, and these criteria determine companies’ performance. This study also discusses the current issues in sustainable finance, such as standardized regulatory frameworks and tracking and effective utilization of sustainable investment. However, the study emphasizes the integration of technology, such as artificial intelligence, machine learning, and blockchain, to improve the landscape of sustainable finance. The findings suggest that AI facilitates risk management, climate risk assessment, impact investing, reducing greenwashing, and monitoring regulatory compliance, which can contribute to sustainable finance.

Keywords: Sustainable finance; ESG (Environmental Social Governance); Climate finance; Green investment (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-96-6495-5_2

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DOI: 10.1007/978-981-96-6495-5_2

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