The Politics of Climate Finance and Policy Initiatives to Promote Sustainable Finance and Address ESG Issues

This chapter examines the international and national efforts to expand green financing during the last decades. As a result, it addresses climate finance politics and policy measures, such as the Paris Agreement and the EU Action Plan on sustainable finance, and academic evidence on the impact of these initiatives on financial markets, including green bond market growth. According to the study, several “policy areas” still need to be enhanced, requiring international cooperation and further action at the country level to ensure a low-carbon transition. The establishment of standardized and mandatory disclosure rules, the adoption of internationally agreed-upon taxonomies of economic activity, and the promotion of climate-aligned financial metrics are all major areas for improvement.