The global climate crisis has become a critical global issue that negatively impacts the survival of living beings in the future, necessitating the involvement of various sectors, including banking. The banking sector plays a significant role in channeling financing to those in need, such as industries and society, by implementing the concept of green banking. Sustainable financing aims to support development that meets present needs without compromising future generations. Green banking emphasizes investments that consider environmental, social, and governance (ESG) impacts while maintaining a balance between financial profit and environmental sustainability. Green banking also plays a crucial role in supporting Indonesia's commitment to reducing carbon emissions within the context of developing environmentally friendly technologies and green financing. This study aims to identify gaps in the implementation of green banking and outline the challenges and opportunities for the banking sector in realizing a more sustainable financial system. Using a qualitative research method based on a literature review, this study finds that while green banking has the potential to support economic and environmental sustainability, its implementation is hindered by low green financial literacy among the public, regulatory limitations, and a lack of incentives for Islamic banks. However, opportunities remain open through government policies, increased public awareness, and financial sustainability innovations. Therefore, collaboration between the government, the banking sector, and society is a key factor in the successful implementation of the green banking concept in promoting green economic sustainability within the Islamic banking system.
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