Editorial: Perspectives on sustainable finance: markets, policy, and decision-making

Perspectives on sustainable finance: markets, policy, and decision-making 1. Market and policy contextOver the past decade, sustainable finance has evolved from a niche theme into a material component of global financial markets and regulatory agendas.What began as a largely voluntary orientation toward environmental and social considerations is now increasingly embedded in market pricing, supervisory frameworks and corporate financing decisions.Climate-and nature-related risks are increasingly being treated as sources of credit risk, valuation uncertainty and balance sheet exposure.Policy initiatives ranging from mandatory sustainability disclosures to prudential oversight are reshaping information flows and incentives across global economies.Despite these developments, financial markets continue to exhibit heterogeneous responses to sustainability-related information.The coexistence of expanding market activity, intensifying policy intervention and uneven pricing outcomes defines the current sustainable finance landscape.This setting highlights the need for analytically grounded perspectives that connect markets, policy and financial decision-making.Against this backdrop, the scale of sustainable finance has continued to expand, particularly within regulated asset management markets.As illustrated in Figure 1, assets managed through sustainable investment funds have grown steadily over recent years, reaching a level that is no longer marginal in relation to broader capital markets.It is important to note that this expansion has been geographically uneven.Europe accounts for the dominant share of sustainable fund assets, reflecting both earlier market adoption and the role of regulatory frameworks in shaping disclosure and product classification.By contrast, sustainable fund markets in the United States and other regions remain comparatively smaller, despite increased policy attention and investor awareness.The resulting regional concentration indicates the importance of institutional and regulatory contexts in determining how sustainability considerations are integrated into Sustainable Finance Review