Sustainable Finance and Investment Practices in Achieving Climate Action Goals

Abstract

This paper aims to examine the crucial role of sustainable finance and investment practices in achieving climate action goals (SDG 13) within the broader framework of the United Nations Sustainable Development Goals (SDGs). It synthesizes existing literature to identify the key drivers, challenges, and collaborative approaches that enable effective financing of climate initiatives. The study employs a systematic literature review methodology, analyzing a range of peer-reviewed articles and empirical studies published over the past five years. A thematic analysis was utilized to categorize key insights into distinct themes, including the impact of investment strategies, implementation barriers, and the role of stakeholder collaboration. The review reveals that targeted investments in climate-friendly projects (e.g., renewable energy and green infrastructure) significantly contribute to emissions reduction and climate resilience. The findings underscore the importance of supportive regulatory frameworks in attracting sustainable finance and highlight persistent barriers such as knowledge gaps and limited access to funding. The study also identifies collaborative governance among governments, financial institutions, and civil society as a key enabler for mobilizing resources and fostering innovation in climate action. The findings offer actionable recommendations for policymakers and financial institutions, emphasizing the need for coherent policies, capacity building, and multi-stakeholder partnerships to enhance the impact of sustainable finance on climate action. This paper provides a timely and comprehensive synthesis of the intricate relationship between sustainable finance and climate action under the SDG framework, contributing valuable insights for both academic discourse and practical implementation.