The Role of Green Finance in Achieving Sustainable Development Goals

Abstract

The transition to a sustainable global economy requires a fundamental shift in financial systems toward environmentally responsible investment practices. Green finance, encompassing green bonds, climate funds, and ESG-integrated portfolios, has emerged as a critical mechanism for aligning capital flows with the United Nations Sustainable Development Goals (SDGs). This paper examines how green finance contributes to achieving SDGs, particularly those related to climate action, clean energy, infrastructure, and sustainable cities. Employing a mixed-methods approach, the study combines a systematic literature review with an analysis of case studies from both developed and emerging economies. The findings indicate that while green finance facilitates progress toward SDGs, its effectiveness is often constrained by regulatory gaps, inconsistent definitions, and underdeveloped markets in low-income countries. The paper concludes with policy recommendations aimed at strengthening global green finance frameworks and improving their alignment with sustainability outcomes.