Evolution of Green Finance: Historical Insights and Sustainable Finance Integration Framework Development

Abstract

 The field of green finance plays a crucial role in global sustainability transitions, yet it remains conceptually fragmented and lacks an integrated framework that connects its historical evolution with contemporary sustainable financing practices. While existing literature highlights key developments such as ethical investment, regulatory reforms, and green financial instruments, these have not been synthesised into a coherent model to guide policy and investment. This study examines the historical trajectory of green finance and proposes a unified framework based on qualitative analysis of policy documents, institutional reports, market data, and academic literature. The findings identify five key drivers: regulatory evolution, investor behaviour, financial innovation, technological enablers, and sustainability outcomes. Persistent challenges include fragmented taxonomies, inconsistent ESG data, greenwashing risks, and unequal access to finance in emerging markets. The study introduces a Sustainable Finance Framework comprising inputs, processes, enablers, and outcomes, demonstrating how historical insights can inform policy, investment strategies, and alignment with SDGs and Net Zero goals.