Literature Review: Links Between Green Finance (Bonds, Loans, Investment) and Corporate ESG

Abstract

In the context of globalization, green finance is a mechanism for supporting the transition to a sustainable economy by directing financial resources toward environmentally responsible enterprises. Using various green finance instruments, individuals and organizations can participate in sustainability efforts. Environmental, social, and governance (ESG) disclosure serves as a framework for improving business sustainability and enhancing awareness related to environmental, social, and governance practices. This study examines the relationship between categories of green finance such as green bonds, green loans, green investment, and ESG implementation within companies. The SPIDER methodology (Sample, Phenomenon of Interest, Design, Evaluation, and Research type) was applied, utilizing literature searches in Scopus, ProQuest, and Plos One, resulting in 19,340 articles. Following classification and relevance assessment, 15 articles were included in the review, consisting of studies published from 2022 to 2024. Among these fifteen articles, several identify a notable association between green finance and ESG across different organizations. Green bonds are associated with positive effects on ESG performance. Green loans have been observed to encourage the development of environmentally focused financial products. Green investment is described as realized through research and development activities, which contribute to innovations in environmentally friendly products and promote transparency in corporate ESG practices.