Sustainable Finance: Tools, Effectiveness, and Challenges

ABSTRACT This article provides an overview of recent research on sustainable finance, focusing on the effectiveness, limitations, and challenges of key instruments used in green finance, biodiversity finance, blended finance, and impact investing. Drawing on empirical evidence and conceptual frameworks, this article highlights how these tools can contribute to environmental and social goals. It also examines the role of shareholders and corporate practices in advancing sustainability. In addition, this article discusses the Asian context, where institutional and economic conditions can create distinct opportunities and challenges for sustainable finance. Finally, the article concludes by emphasizing the need for interdisciplinary research given the complex nature of sustainability challenges. JEL Classification: G30, G32, M14, Q01, Q56