Accelerating the energy transition The Role of Green Finance and its Challenges for Europe

Green finance has been a burgeoning sector since the Paris Agreement and is at the crossroads of financial, socio-economic and environmental challenges. It is hybrid in nature: it uses financial instruments and focuses on environmental issues, while coming under the wider field of so-called “sustainable” finance that assumes a broader approach with the inclusion of socio-economic and governance challenges. It is a catalyst as it facilitates and accelerates the transition to a low-carbon economy. It also includes an increasing range of instruments. From green bonds to green indices, green loans and capital raising activities, the sector is growing both quantitatively and qualitatively. So-called “green” issuance debt alone increased fivefold in nearly three years to reach US $ 257 billion in 2019, emphasizing its on- going innovation and attractiveness.