The Role of Green Corporate Finance in Enhancing Firm Resilience to Climate Change

ABSTRACT This paper explores the pivotal role of green corporate finance in enhancing firm resilience to climate change, a critical challenge in today's global economy. By integrating Environmental, Social, and Governance (ESG) factors into financial strategies, green finance, encompassing tools such as green bonds, loans, and sustainability‐linked instruments have emerged as a transformative force in promoting sustainable development. Through an extensive review of the literature, this study highlights the significant impact of green finance on long‐term financial performance, operational efficiency, and corporate adaptability. The findings underscore that firms actively engaging in green finance not only achieve superior financial outcomes but also strengthen their resilience against environmental and economic shocks. The paper also examines the role of public‐private partnerships, technological innovation, and sustainable practices in amplifying the benefits of green finance across key sectors, including energy, agriculture, and transportation. Despite the progress made, the study emphasizes the need for ongoing research and policy development to fully realize the potential of green finance in fostering a sustainable and resilient global economy. The insights gained from this analysis provide valuable guidance for policymakers, financial institutions, and corporations seeking to integrate green finance into their strategic frameworks, ensuring long‐term economic stability and environmental sustainability.