Financing Green Transformation in the EU’s Economy: Selected Aspects of the Implementation of EU Programmes

Abstract

Objective: The aim of this paper is to present ways in which the EU and its member states finance sustainability and what the impact of this different sources of financing is on sustaining the EU’s socioeconomic development. The main purpose of the article is to justify the role of green finance in the process of balancing the socioeconomic development of the European Union, with particular attention to environmental aspects.

Research Design & Methods: The study is based on the literature review of green finance, with a particular focus on the functioning of the green economy in the EU countries.

Findings: Sustainable financing is defined as investment decisions that include environmental, social, and governance (ESG) factors. Contemporary economic crises may be a stimulus for rebuilding more sustainable economy. Sustainable financing may be also relevant for achieving the EU’s climate and environmental policy goals and for putting the EU’s economy back on the road to recovery.

Implications / Recommendations: This article can serve as a basis for financial decision-makers in balancing the socioeconomic development of EU countries, as well as for more extended analyses taking into account new aspects of green finance.

Contribution / Value Added: The added value of this study lies primarily in the skillful connecting of four main aspects of green finance activity in EU: (1) presenting chosen – most important, in the author’s opinion – theoretical aspects of green finance, taking into considerations especially the EU; (2) describing examples of some green finance initiatives implemented by the EU in the form of particular programmes; (3) presenting the most important part of the EU’s green financing legislation; (4) showing basic interconnections between green finance and sustainability, and vice versa.

Article classification: theoretical/review paper

JEL classification: Q50.