Green Finance and the New Dynamics of Sustainable Investments
Chapter from the book:
Şahin,
C.
(ed.)
2025.
New Horizons in Finance: Current Research and Future Approaches .
Synopsis
The goal of profit maximization, which lies at the heart of traditional financial theories, has been replaced by a multidimensional approach that aims to achieve both economic gains and environmental and social benefits. This section examines in detail the effects of green finance and sustainable investments on the financial system. The literature shows that corporate green bonds and ESG practices positively impact companies' environmental performance, increase long-term investor decisions, and support financial stability. Green bonds serve as a strategic sustainability tool for businesses, and ESG ratings promote transparency and a culture of sustainability within companies. Research conducted in Turkey and globally demonstrates the effects of climate risks on the banking sector and corporate financial indicators. Furthermore, the integration of artificial intelligence and digital technologies into ESG criteria supports the reliability of financial decisions by enhancing data collection, reporting, and risk analysis processes. Green loans and sustainable investment instruments improve environmental performance while shaping investor behavior and capital flows. International regulations and policy priorities support the active use of sustainable finance instruments and contribute to the green transition in financial markets. The literature demonstrates that sustainable investments are linked to economic growth, social welfare, and environmental sustainability. This study comprehensively examines the strategic importance of green finance and sustainable investment practices at both the corporate governance and systemic levels. The findings provide a scientific framework and vision for the sustainability-focused transformation of future financial policies and corporate strategies.
