The Fundamentals of Sustainable Finance
Chapter from the book: Alıcı, A. (ed.) 2025. Financial Sustainability: Theoretical Approaches and Strategic Applications.

Abdulkadir Alıcı
Kastamonu University

Synopsis

This section provides a comprehensive overview of the concept of sustainable finance, from its historical development to its current applications. The traditional finance approach, which focuses solely on profitability, has led to the emergence of a new paradigm due to its disregard for environmental and social costs. In this context, sustainable finance aims to create long-term economic value and fulfill the social responsibilities of the financial system by focusing on environmental, social, and governance (ESG) principles. The section first explains the financial dimension of sustainability from a theoretical perspective, then examines the international standards, policy regulations, and investor trends that have developed in this area. The rise of financial instruments such as green bonds, sustainability-linked loans, and transition bonds demonstrates that environmental and social impacts are becoming increasingly important in capital markets. Additionally, it is emphasized that sustainable finance is a critical tool not only for combating climate change but also for social justice, corporate governance, and inclusive growth. In conclusion, the chapter highlights that sustainable finance plays a strategic role in the transformation of financial markets on a global scale and will be decisive in balancing economic development with environmental responsibility in the future.

How to cite this book

Alıcı, A. (2025). The Fundamentals of Sustainable Finance. In: Alıcı, A. (ed.), Financial Sustainability: Theoretical Approaches and Strategic Applications. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub903.c3733

License

Published

October 19, 2025

DOI