Green finance and artificial intelligence: Dual drivers of sustainability

Purpose: This paper systematically reviews the literature on green finance to evaluate its role as a catalyst for sustainable development and to explore how emerging challenges in disclosure and transparency influence its effectiveness. Beyond mapping the current status of green financial instruments, the study considers their economic and strategic implications for firms, investors, and policymakers.Design/methodology/approach: Using the SALSA framework (Search, Appraisal, Synthesis, and Analysis), the review synthesizes findings from recent studies across finance, economics, and sustainability research.Findings: The review highlights that while green finance has become central to funding low-carbon transitions, its credibility depends on reliable sustainability disclosure. Despite rapid global expansion in reporting, inconsistencies and weak assurance mechanisms continue to undermine comparability and investor confidence. Nevertheless, evidence suggests that firms engaged in green practices benefit from lower capital costs, stronger financial performance, and improved risk resilience. Green finance further contributes to systemic economic gains by fostering innovation, directing capital flows toward sustainable infrastructure, and supporting long-term climate goals. The paper concludes by identifying opportunities for integrating digital technologies such as artificial intelligence to enhance transparency, accountability, and impact measurement in green finance.