A Study on Green Financing Impact Towards Investing in Sustainable Business

Green financing has become a vital tool for connecting economic growth with environmental sustainability. In light of India’s rapid economic growth and its goal of achieving net-zero carbon emissions by 2070, green finance is essential for attracting investment in environmentally friendly projects. This study looks at how green financing affects investment choices for sustainable business practices in India. By thoroughly reviewing secondary data, policy documents, and previous studies, the paper examines the significance, opportunities, challenges, and effectiveness of green finance options like green bonds, green loans, and sustainability-linked financing. The findings show that green financing positively impacts sustainable investment decisions by improving access to capital, boosting corporate reputation, and encouraging long-term cost efficiency. However, challenges remain, such as the absence of a standardized classification, high perceived risk, and greenwashing. This study adds to the existing literature by summarizing recent changes in India’s green finance landscape and providing policy and management suggestions to enhance sustainable investment outcomes.