GREEN FINANCE AND SUSTAINABLE DEVELOPMENT GOALS: CHALLENGES AND OPPORTUNITIES IN DEVELOPING ECONOMIES

Abstract

In developing Asian economies, marked by climate vulnerability, rapid urbanization, and institutional fragility, green finance is a potential driver of the United Nations Sustainable Development Goals (SDGs). Yet its measurable impact remains unclear, particularly where economic inequality and social vulnerability persist. This study examines the relationship between green finance and SDG performance across 21 developing Asian countries over 15 years, incorporating macroeconomic moderators such as GDP, inflation, CO₂ emissions, and poverty. Results show that poverty is the most statistically significant determinant of sustainable development, while GDP and CO₂ emissions lose significance once other macroeconomic factors are included. This suggests a weak linkage between financial flows and tangible development outcomes. The findings highlight that current green finance mechanisms are insufficiently inclusive and misaligned with the structural realities of low-income, climate-vulnerable nations. Recalibrating green finance frameworks to explicitly prioritize poverty reduction, social equity, and institutional capacity is essential for achieving inclusive, resilient, and transformative development.

Keywords: Green Finance, Sustainable Development Goals, Poverty Reduction, Developing Economies