THE ROLE OF GREEN FINANCE IN ENVIRONMENTAL PROTECTION. EVIDENCE FROM THE EU

During recent years, the European Union (EU) has encouraged investments in sustainable activities meant to bring environmental and social benefits on a long term. This process was named sustainable finance and it has become one of the drivers of EU environmental strategy and one of the EU policies. The objective of this paper is to analyse how green finance, as part of the sustainable finance strategy, can help to improve environmental protection. The first part of the paper reviews the literature regarding the concept of green finance, sustainable finance and also how green finance relates to environmental protection. The second part of our paper pays attention to the institutional initiatives regarding green finance at EU level and their impact on environment protection. As research method, we use table and graphical method in order to show the impact of green finance legislation on environmental protection, measuring the carbon emissions and also the progress in accomplishing the Sustainable Development Goals (SDGs). The EU is already showing that it is possible to have economic growth and also to reduce carbon emissions at the same time (European Commission, 2019b). Regarding the EU's performance on the SDGs, EU member states are already leading the implementation of the SDGs. Yet, no single country in the world has reached all the agreed objectives. At the same time, the EU's performance results on the SDGs show that the EU needs to continue its efforts in this direction. Finally, we conclude that green finance encompasses innovative financial instruments aimed at the environmental protection and the accomplishment of sustainable use of resources.