This study comprehensively reviews the relationship between green finance and sustainable development, specifically focusing on combatting climate change and achieving carbon neutrality. Utilizing a narrative review methodology, the study examines a range of scholarly articles and publications to identify key themes, findings, and future directions in green finance. The review emphasizes the crucial role of substantial investments in green and low-carbon initiatives to address climate change effectively and promote sustainable economic growth. It highlights the necessity of robust regulatory frameworks that facilitate the availability of green finance and the integration of carbon–neutral practices. Additionally, the paper explores the potential of impact investing, wherein investors accept lower financial returns in exchange for non-financial benefits in green finance. It underscores the influential role of institutional ownership in guiding companies toward enhanced environmental and social performance. Moreover, integrating environmental, social, and governance (ESG) factors in investment decisions is critical for sustainable finance. Addressing the intersection of climate change and risk management, the review highlights the implications of environmental risks on financial decision-making. Effective communication strategies can raise public awareness and support for climate policies. The study concludes by calling for collaboration, further research, and policy measures to advance green finance and foster sustainable economic growth. It recommends aligning financial incentives with sustainable outcomes, fostering transparency, and incorporating social equity in green finance initiatives to contribute towards achieving sustainable development goals and promoting a greener future.

This paper comprehensively reviews the interconnections between climate change, decarbonization, and green finance. The urgency of addressing climate change and its catastrophic consequences needs to focus on green finance as a vital tool in the global struggle against environmental damage. Green finance involves supplying investments, loans, or capital to support environmentally friendly activities, facilitating the transition to a more sustainable future. This review explores the theoretical frame of reference for green finance, including its impacts on climate change, decarbonization of economies, carbon-stranded assets, risk management, renewable energy, and sustainable economic growth. Additionally, it examines regional focuses in Asia, such as the importance of green finance in China and the beliefs and challenges of green finance in Bangladesh. The review also discusses future directions and recommendations for advancing green finance. The review examines the current research in green finance and how it can address environmental challenges and promote sustainable development. More research needs to be conducted in mainstream economics and finance journals to bridge the knowledge gap and foster broader scholarly engagement in green finance. Researchers, policymakers, investors, and stakeholders will receive help from the study's reliable and robust insights into combating climate change and promoting sustainable development.

Purpose: This study examines how oil market volatility and clean energy trends impact the stock performance of automakers, specifically comparing traditional manufacturers with electric vehicle (EV) producers such as BYD and Tesla. The objective is to assess the extent to which traditional automakers are sensitive to oil market fluctuations, while EV manufacturers align more closely with clean energy dynamics, particularly during global market crises. Design/methodology/approach: Using daily data from January 2013 to December 2023, we conduct linear regressions, GARCH, DCC-GARCH and the Diebold–Yilmaz connectedness approaches in the analysis. We use these econometric models to capture volatility patterns, correlations and cross-market spillovers. Findings: Traditional manufacturers are affected by both oil prices and clean energy development. While traditional automakers remain more vulnerable to oil price volatility, global leading EV manufacturers BYD and Tesla are less sensitive to oil price shocks and show strong alignment with clean energy indices. Significant volatility spillovers are observed during global crises, such as the COVID-19 pandemic and the Russia–Ukraine conflict. Originality/value: The paper uniquely integrates clean energy indices into the analysis of oil price impacts on automaker stocks. By comparing traditional and EV manufacturers using advanced econometric models, it sheds light on the literature of energy markets and sustainable financial markets.