INTERNATIONAL JOURNAL OF FINANCIAL ECONOMICS (IJEFE)
Vol. 2 No. 1 (2025): JULY

THE IMPACT OF GREEN FINANCE AND SUSTAINABLE INVESTMENT ON CORPORATE FINANCIAL PERFORMANCE: A CROSS-SECTOR LITERATURE REVIEW

Putri Ridhotul Uliyah (Sekolah Tinggi Ilmu Manajemen Indonesia, Meulaboh)
Siti Hajar (Sekolah Tinggi Ilmu Manajemen Indonesia, Meulaboh)
Junaidi Junaidi (Sekolah Tinggi Ilmu Manajemen Indonesia, Meulaboh)



Article Info

Publish Date
01 Jul 2025

Abstract

This study analyzes the impact of green finance and sustainable investment on corporate financial performance through a comprehensive cross-sector literature review. The increasing global awareness of environmental issues has encouraged companies to adopt sustainable finance practices. This study synthesizes findings from ten recent peer-reviewed journal articles (2022-2025) covering a wide range of geographic and sectoral focuses. The review results show that green finance and sustainable investment tend to have a positive impact on corporate financial performance, mainly through lowering the cost of capital, enhancing reputation, and encouraging green innovation. These mechanisms vary across sectors, with high-environment risk sectors focusing on risk management, while services and finance sectors place greater emphasis on transparency and investor attraction. Challenges such as high upfront costs, lack of standards, and greenwashing risks remain, but opportunities from market growth, regulatory support, and technological innovation are significant. This study provides important insights for policymakers, investors, and companies in formulating effective sustainability strategies.

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Journal Info

Abbrev

IJEFE

Publisher

Subject

Economics, Econometrics & Finance

Description

INTERNATIONAL JOURNAL OF FINANCIAL ECONOMICS (IJEFE) is a scientific journal that publishes articles in the field of Business and finance that contain conceptual ideas in the fields of Economics, Accounting, Management, Business and finance. The scope is Human Resource Management, Marketing ...