GREEN FINANCE AND SUSTAINABLE BANKING: GLOBAL TRENDS AND POLICY IMPLICATIONS FOR EMERGING ECONOMIES

Green finance and sustainable banking have moved from a niche area of corporate responsibility to a core component of financial-sector policy. This article examines the principal global trends shaping green finance and evaluates their implications for emerging market and developing economies (EMDEs). Using a qualitative comparative review of international standards, supervisory guidance, market frameworks, and recent policy reports, the study identifies four dominant trends: the institutionalization of climate-risk management in banking supervision; the spread of taxonomies and sustainability disclosure standards; the rapid development of labelled debt markets; and the growing use of central-bank and supervisory tools to address climate-related financial risks. The findings show that EMDEs face a dual challenge. They must mobilize significantly more private capital for low-carbon and climate-resilient investment while protecting financial stability, inclusion, and development priorities. The article argues that effective policy should therefore combine credible taxonomies, proportionate disclosure requirements, climate-risk supervision, project-pipeline development, and blended or catalytic finance. A sequenced approach is preferable to direct transplantation of advanced-economy rules because data quality, market depth, institutional capacity, and transition pathways differ substantially across countries.