GREEN FINANCE AND ESG METRICS: REDEFINING FINANCIAL DECISION-MAKING MODELS

Abstract

The integration of environmental, social, and governance (ESG) metrics into financial decision-making models marks a transformative shift in global finance. This review paper explores the growing relevance of green finance as a strategic framework aimed at aligning economic development with environmental sustainability and social accountability. By examining the theoretical foundations and practical applications of ESG metrics, the paper highlights how institutional investors, regulatory bodies, and financial institutions are reshaping risk assessments and investment strategies. The review synthesizes recent literature on ESG integration, green bonds, and sustainable portfolio management, while also addressing the challenges of standardization, data transparency, and greenwashing.