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Green Finance

Discover how $5 trillion flows into renewable energy, carbon reduction, and climate solutions through green bonds and sustainable investing

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Islamic Finance Principles

Introduction to Green Finance

Green finance mobilizes capital for environmental sustainability. Over $5 trillion has been invested in climate solutions through green bonds, ESG funds, and climate finance since 2015. The goal: fund the transition to net-zero carbon emissions by 2050, requiring $125 trillion globally—the largest capital reallocation in history.

Why Green Finance Matters

Climate change requires $5-7 trillion annually to meet Paris Agreement targets. Public funding covers only 20%. The remaining 80% must come from private capital—green bonds, sustainable loans, and climate funds. Without green finance, renewable energy, carbon capture, and climate adaptation cannot scale.

Market Growth

$2.3T
Green bonds outstanding
$35T
ESG assets under management
50%
Annual green bond growth
$125T
Needed by 2050 for net zero

Use of Proceeds

Renewable Energy38%
Energy Efficiency22%
Clean Transportation18%
Sustainable Water/Waste15%
Other (biodiversity, adaptation)7%

Key Drivers

  • →Regulatory pressure: EU Taxonomy, SEC climate disclosure, carbon pricing pushing capital to green assets
  • →Investor demand: Institutional investors (pensions, endowments) mandating ESG/climate criteria
  • →Cost competitiveness: Solar/wind now cheaper than coal in most markets—green = profitable
  • →Climate risk: Physical risks (floods, fires) and transition risks (stranded assets) forcing reallocation