Green Finance and ESG Investing: Aligning Profit with Sustainability

Abstract

Green finance and ESG (Environmental, Social, and Governance) investing are transforming the financial landscape by integrating sustainability into traditional financial decision-making. This paper explores the principles, mechanisms, and impacts of green finance and ESG investing, emphasizing how they help align economic profit with environmental and social responsibility. By analyzing current practices, policy frameworks, and case studies, the study assesses the performance of ESG investments and their implications for sustainable development. The research highlights the growing demand for responsible investing and the shift from short-term profit maximization to long-term value creation. The paper also discusses the challenges in standardizing ESG metrics, greenwashing concerns, and the need for more robust regulatory oversight. The findings suggest that while ESG investing is not without its limitations, it offers a viable path to balance financial returns with positive environmental and social outcomes.