Page 19 - Green Finance 2024

startups focusing on environmentally friendly products and services, thereby fostering

technological advancements in green sectors (Boubaker, Cumming, & Nguyen, 2018).

Such investments are crucial in promoting new sustainable technologies and business
models, which are essential for achieving long-term environmental objectives.

The direct environmental impact of green finance is also evident in specific sectors like

sustainable agriculture, where investments support practices that are environmentally
sustainable and resource-efficient. These investments are critical for biodiversity

conservation and sustainable land use, ensuring long-term food security and ecosystem

health. In urban development, green finance has a significant role in promoting

sustainable infrastructure, particularly through green real estate investment trusts

(REITs) and direct investments in green buildings. These investments lead to energy-
efficient, environmentally friendly urban spaces, crucial for reducing the carbon

footprint of cities and enhancing the resilience of urban infrastructure against

environmental challenges (Ezroj, 2020).

However, the effectiveness and actual impact of green finance instruments on the
environment are subject to ongoing debate and research. One of the main challenges in

assessing their impact is the lack of standardized metrics and definitions for what

constitutes a ‘green’ investment, which affects the ability to measure and compare the

environmental outcomes accurately. This issue is compounded by concerns over

greenwashing, where the environmental benefits of certain investments may be
overstated or misrepresented (Schoenmaker & Schramade, 2019). Nevertheless, despite

these challenges, the overall contribution of green finance to environmental

sustainability is widely recognized. Studies have shown that investments in green

projects can lead to substantial reductions in greenhouse gas emissions, improvement in

energy efficiency, and promotion of sustainable resource use (D. D. Nguyen &
Taghizadeh-Hesary, 2020).

Looking ahead, the future of green finance and its direct environmental impact appear

promising, with increasing global awareness of environmental issues and a growing

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