Abhatoo - Centre Nationale de Documentation

There is the quickening world climate crisis and growing pressure on sustainably achieving economic growth ; green banking is now a way to guarantee we are using those financial resources to support environmental objectives. This paper does a detailed examination of the stimulus effect of green finance policies on corporate environmental performance. The main objective is to break down the ways these policies get companies to use more sustainable things and spend money on nice to the environment tech. We say that green finance does more than give money, it’s like a big system that uses money, how people think about it, and rules all at the same time. Core mechanism identified is to shift cost of capital and firm’s financing constraints dependent on carbon footprint, incentivize targeted funding in green-innovation and research, improve firm reputation and market valuation by signalling commitment to sustainability, and forcing companies to improve risk management of environment, and disclosure of information. This paper shows, by looking at real-world examples, how tools like green credit, green bonds, and links to sustainable borrowing all create a strong business reason to help the environment. The results show that green finance policies are able to take those environmental problems and turn them into tangible money issues for companies. This makes companies more likely to act early on these problems, instead of waiting until it is too late. In terms of policy implications, it’s recommended that governments standardize the definition of green, increase the transparency of green, and use green finance to integrate with other environmental regulations, so as to better promote the emergence of a greener corporate group.