THE IMPACT OF THE SHIFT TOWARDS GREEN FINANCING ON REDUCING COMPANIES' VULNERABILITY TO FINANCIAL CRISES.

Abstract

This study seeks to examine the impact of transitioning to green finance on mitigating the financial fragility experienced by firms amid recurring economic and environmental crises. Utilizing a descriptive and analytical methodology—supported by case studies and credible international sources—the research explores the relationship between the use of green finance instruments, such as green bonds and eco-loans, and indicators of corporate financial stability.

The findings reveal that companies implementing green finance practices exhibit stronger financial resilience and greater risk management capacity compared to those relying on traditional financing models. Moreover, the study highlights that sustainability extends beyond environmental considerations, serving as a fundamental element in reducing financial volatility and enhancing firms' ability to withstand crises.

Based on these insights, the research concludes with a series of recommendations, most notably the importance of enacting policies that promote green finance and the development of sustainable financial instruments tailored to the diverse needs of companies—particularly in emerging markets.