Green Finance

What is Green Finance?

Green finance is the concept of integrating the world of finance and business in environmentally friendly manner. Here, individual, business consumers, producers, investors, and financial lenders can participate. Green finance can be promoted in various ways on the basis of participants. It may be managed by financial incentives, aspiration to preserve the planet, or the arrangement of both. Furthermore, it contributes proactively as well as environmentally friendly manner such as promoting the recycling of used products. Green finance avoids any business promotion involves damaging the environment at present or for future generations. 

How does it work?

Financial institutions can do it by providing loan to individuals, small businesses and large organizations in an environmentally friendly attitude. For example, loans may be used to support the propagation of renewable energy. A lender should use this loan in order to finance the growth of a solar power plant that generates power from the sun utilizing solar panels. Green financiers also prefer the business of wind power generation. These organizations build up wind farms using large wind turbines onshore and offshore in order to capture wind and generate power. 

Power generating companies that use conventional source of fuel like fossil, coal, gas etc. are not eligible to participate in green finance. For example, during generating power, coal releases huge amount of emissions in the air which is very harmful and dangerous for environment. As a result, power generating companies that use coal are not eligible to participate for a green finance. Although, clean coal emits very little emissions but may never be categorized as a green investment.

Offering environmental incentives to market participants, green finance may also be encouraged. Green finance has a very proactive format which is allowing small businesses to participate who are not directly engaged in clean energy business. For example, vehicles selling companies concentrated in selling cars which are designed using a hybrid fuel integrated both fossil fuels and renewable energy.

Green energy companies contributing to develop green technologies are hoping to generate huge amount of power of world in future.


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