Exploring sustainable finance mechanisms for green energy transition: A comprehensive review and analysis

Abstract

This study elucidate the role of sustainable finance in advancing the global transition towards renewable energy sources. Employing a systematic literature review and content analysis, the research scrutinizes sustainable finance mechanisms, the impact of Environmental, Social, and Governance (ESG) criteria on investment decisions, the significance of regulatory frameworks, and the strategic implications for stakeholders within the green energy ecosystem. The methodology encompasses a detailed examination of peer-reviewed articles, industry reports, and policy documents from 2013 to 2024, focusing on innovations, challenges, and opportunities in sustainable finance. The study identifies green bonds, loans, and investment funds as pivotal in mobilizing capital for green energy projects, yet highlights existing barriers such as regulatory uncertainties and the need for standardized ESG criteria. Key findings reveal that while sustainable finance is crucial for environmental sustainability and economic development, its effectiveness is contingent upon robust regulatory support and clear standards. Moreover, the research underscores the importance of stakeholder collaboration and innovative financial products in overcoming challenges and enhancing green energy adoption. The study emphasizes the critical need for advancing sustainable finance mechanisms, enhancing regulatory frameworks, and fostering stakeholder collaboration to facilitate a successful transition to green energy. It contributes valuable insights into sustainable finance's evolving landscape, offering guidance for policymakers, investors, and industry practitioners aiming to achieve long-term sustainability goals. Keywords: Sustainable Finance Mechanisms, Green Energy Transition, Environmental, Social, Governance (ESG) Criteria, Regulatory Frameworks.