Green Finance and Fintech: Toward a More Sustainable Financial System

Abstract

In the past few decades, there has been a technology revolution across the world, and along with the progression, there has been a major outcome in the form of environmental degradation. Even when the earth is witnessing environmental degradation and climate change, countries have awakened to improve their financial activities. Curtailing financial expenses and optimum utilization of financial resources are now considered one more solution to environmental challenges. The organizations’ green and low-carbon transformation now becomes the major business policy across the industries. Green finance is a monetary form and process of reducing carbon footprints and eco-friendlier business formats and processes. Business corporations, NGOs, researchers, academicians, and society have found green finance a catalyst in balancing our economy and nature. The world is designing a monetary system to create and develop eco-friendly systems that will decrease ozone-layer depletion, control pollution, and increase green activities. This monetary system would work to protect the environment along with increasing organizational revenues. Green finance involves collecting economic resources to tackle climate change and environmental issues. It is a way of sustainable finance focusing on environmental, social, and governance (ESG) issues and risks, aiming to increase long-term investments in sustainable economic activities and projects. This chapter will explore the role and significance of green finance in creating a sustainable financial system to address the issues of environmental degradation. In this chapter, the term green finance will be described in a boarder sense.