A Review of Financing Green Innovation: Pathways to Sustainable Development

Abstract

As there is increasing focus on critical environmental issues such as climate change and global warming from governments, there is an urgent need to examine the factors that enable and encourage green initiatives. Green finance which emphasizes environmentally responsible investments and practices has emerged as a vital tool in achieving neutrality and ensuring sustainable development, economic growth as well. This paper reviews the role of financial assistance and it’s inter connection with sustainable development. The adverse externalities associated with environmental degradation draws attention to the need of sustainable innovation in public management. Green finance provides financial support for R&D activities of renewable energy and sustainable products processes. The analysis will highlight the key issues faced by policymakers and stakeholders to develop and combine two aspects in research and practice to ensure environmental harmony and further promoting long term sustainability. Active collaboration between public and private organisations facilitates the transition of the financial system toward sustainability. Using a hybrid research method that integrates bibliometric analysis and a systematic literature review, the paper identifies major trends, challenges, and opportunities in green finance. Findings highlight that effective financing of green innovation depends on collaborative efforts among governments, financial institutions, and private sectors. The study concludes by proposing strategic pathways to strengthen the financial ecosystem for sustainable development.