Sustainable finance has gained significant traction in the economic debate due to the pressing need to solve global environmental concerns and socio-economic imbalances. Sustainable finance aims to create long-term profit while reducing the risks associated with unsustainable practices by incorporating environmental, social, and governance (ESG) factors into investment decision-making processes. This chapter thoroughly analyzes sustainable finance, clarifying its underlying concepts, principal motivators, financial tools, the function of monetary establishments, and the related obstacles and prospects. In conclusion, sustainable finance signifies a paradigm change in the direction of an environmentally sustainable, resilient, and inclusive economic system.