Green Finance

Financial mechanisms are the most essential aspect of support to put the green economy into reality. The term ‘finance,’ means the financial resources are utilized to expand or achieve specific purposes of business. Green finance is then used to expand the returns and profits that are associated with sustainability, no matter at the national level, single company’s level, or personal level. Traditionally there are many application formats of green finance depending on the subjects that are utilizing the financial resources, such as loaning, leasing, and investment, to get returns in the environment, economy, and social equity. Many sustainable financing principles have been proposed to specifically and financially support sustainable enterprises. Therefore, green finance is applied to reduce the financial burdens while pursuing a green economy but also as the carrot to support green policies in addition to law enforcement. Currently, green finance is combined with the function of improving corporate governance especially when it comes to investment issues. ESG as a small-scale sustainable development concept is the most popular principle requiring enterprises to be sustainable. More technically, Environmental Taxonomy is serving as the guide for investors or bankers to identify sustainable enterprises following the principles of ESG in operation.