Central European Business Review 2023, 12(2):105-130 | DOI: 10.18267/j.cebr.317

Role of Green Finance in Greening the Economy: Conceptual Approach

Vilija Aleknevičienė ORCID...1, Asta Bendoraitytė ORCID...2
1 Vytautas Magnus University, Faculty of Bioeconomy Development, Department of Applied Economics, Finance and Accounting, Kaunas district, Lithuania, vilija.alekneviciene@vdu.lt
2 Vytautas Magnus University, Faculty of Bioeconomy Development, Department of Applied Economics, Finance and Accounting, Kaunas district, Lithuania, asta.bendoraityte@vdu.lt

Currently, economic development of countries and regions is not possible without the implementation of the European Green Deal. A set of policy initiatives by the European Commission is closely related to concepts such as greening the economy, green finance, climate finance, climate change adaptation and mitigation, environmental protection and others. This research is dedicated to highlighting the role of green finance in environmental protection and development of the financial sector. Green finance connects the worlds of finance and business with environmentally friendly behaviour. In principle, all strategic decisions made by business organisations must take into account the potential impact on the environment, which means that value creation in the long term is integral to the well-being of current and future generations. The novelty of the research lies in the developed conceptual framework of the role of green finance in greening the economy. The conceptual framework covers three main elements of green economy: real green economy, green finance and providers of green finance – the green financial sector and public funds. It is developed by applying the methods of content analysis and synthesis, comparison and logical modelling, the model as a research design proposed by Jaakkola (2020), a system test proposed by Arnold and Wade (2015) and the main features of the conceptual framework presented by Jabareen (2009).
Implications for Central European audience: The main “green” economic and financial concepts are described and their interconnectedness is revealed in this study. This is important in the phase of greening the economy when various actors – users of information and decision-makers – interpret the concepts differently. Different understanding and thinking slow down the development of green economy. The developed conceptual framework provides a clear understanding of how business and public organisations, as well as individuals, can change their behaviour to environmentally friendly by investing in real investment projects or financial assets. Finally, the main research challenges and directions related to green real and financial investments are revealed.

Keywords: Green finance; green economy; environmental protection; green financial sector; green public funds
JEL classification: Q50, Q56

Received: January 6, 2022; Revised: June 29, 2022; Accepted: August 12, 2022; Prepublished online: September 8, 2022; Published: May 25, 2023  Show citation

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Aleknevičien&#, V., & Bendoraityt&#, A. (2023). Role of Green Finance in Greening the Economy: Conceptual Approach. Central European Business Review, 12(2), 105-130. doi: 10.18267/j.cebr.317
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