What is green finance?

Green finance is a financial practice that focuses on investing in environmentally friendly and sustainable projects and companies. This may include, for example, renewable energy projects, improving energy efficiency, projects promoting recycling and promoting sustainable transport.

Green financing has become an increasingly important part of economic activity, as environmental awareness and sustainable development have become central themes. Many investors and financial institutions have started to prefer green investments instead of traditional, environmentally harmful projects.

Green financing can take different forms, such as green loans, green bonds or green investments. The purpose of these forms of financing is to promote sustainable development and environmental protection while generating financial benefits for investors.

Green finance is part of the broader concept of sustainable finance, which aims to take into account environmental and social aspects alongside traditional financial profitability. This helps create a more sustainable and responsible economy for future generations.

Sources: Sitra, Ilmastorahasto