Article in Journal

Transition Finance and its Relationship to Green Finance

Jacob Babylon Schumacher
CESifo, Munich, 2023

EconPol Forum 24 (1), 13-16
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  • Both green and transition finance aim to promote improvements to environmental outcomes of organizations
  • Transition finance is best defined as financial activities that are conditional on entities achieving contextually relevant environmental and socially sustainable criteria within a limited time frame
  • In contrast to green finance, transition finance recognizes the importance of addressing social issues along with environmental issues
  • Policymakers should focus on making greenwashing within transition finance and green finance more costly
  • As societies begin to seriously speed green transition plans, the role of transition finance will continue to grow

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