Enhancing Green Finance for Inclusive Green Growth: A Systematic Approach

Abstract

Recently, green financing has become a popular technique for dealing with environmental issues. However, whether green financing is effective in addressing current global environmental issues remains to be seen since the green investment gap has been discovered to be rather sizable, with no certainty regarding how to fill it. The purpose of this study was to systematically analyze green finance in all of its forms, instruments, and measurements. Herein, we highlighted overall research trends in an effort to enhance green finance for inclusive green investment, as well as examined the progress needed to fill the green finance gap. This study also provides information on which authors, countries, publishers, and journals are contributing most to green finance. The methodological approach used in many reviewed papers was determined as a benchmark for those authors interested in green finance. Moreover, this study critically analyzes and summarizes 146 relevant studies. The results of our review study imply that the green financing gap is frequently observed because of low finance levels, poor green project selection/management, risk and return trade-off, and a lack of analytical tools and expertise in identifying and assessing green project risks. More specifically, regulatory issues have been observed as the main challenge in enhancing green finance. Therefore, we propose further studies to be conducted on how to enhance green finance for green investment that could deliberately affect green growth. Simultaneously, we noted what incentives could initiate private investors to make green investments, and what additional green financing methods should be introduced to fill the financing gap. Finally, this study seeks to have an impact in assisting future studies to consider the status of each country in terms of green finance mobilization and capital contribution by sharing the specific experience of that country and what lessons could be learned from that country.