Integrating Green Finance and Sustainability-Oriented Governance

Abstract

Recent investment practices have introduced new financing methods and organizational models aimed at addressing climate challenges. Green finance has become a pivotal tool for reducing emissions and fostering sustainability by incorporating environmental considerations into financial decision-making. This chapter provides a comprehensive overview of integrating non-financial elements into financial decision-making, advocating for a model that combines green finance with environmental governance. It analyzes the role of financial development and the effectiveness of environmental governance in guiding financing and investment operations toward improved environmental performance. The authors conclude that this approach is crucial for fostering a sustainable economy, with benefits extending beyond investors to society as a whole. Based on this work, they suggest that investments aimed at generating wealth, supporting economic growth, and combating climate damage must be accompanied by effective environmental governance to align economic efficiency with environmental sustainability.