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Green Finance and Sustainable Investment Trends in Indian Capital Markets

Author

Listed:
  • Syed Muskan

    (BBA Student, Bhavan’s Vivekananda College of Science, Humanities and Commerce Sainikpuri, Secunderabad)

  • Jasmine Sandhu

    (BBA Student, Bhavan’s Vivekananda College of Science, Humanities and Commerce Sainikpuri, Secunderabad)

  • Rohit Kumar Sankhua

    (BCOM (Hons.) Student, Bhavan’s Vivekananda College of Science, Humanities and Commerce Sainikpuri, Secunderabad)

Abstract

Growing emphasis on environmental concerns has resulted in green finance gaining significance within contemporary financial systems, particularly in emerging economies such as India. Indian capital markets have increasingly begun to integrate sustainability linked financial instruments aimed at fostering environmentally responsible economic development. This study aims to examine the development and recent trends of green finance and sustainable investment in India, with specific reference to green bonds, ESG based financial products, and sustainability linked market indicators. The research relies exclusively on secondary data obtained from regulatory documents, stock exchange disclosures, and globally recognized sustainability databases. A descriptive and analytical research design is adopted, using trend analysis, growth measures, and comparative indicators to evaluate the expansion of sustainable investment avenues over time. The findings reveal a clear rise in green bond issuances and growing participation in ESG oriented investments, along with enhanced regulatory involvement in promoting sustainable finance practices. However, the study also identifies persistent challenges, including restricted market reach, absence of standardized ESG disclosure frameworks, and comparatively low levels of investor awareness. By presenting a consolidated overview of green finance initiatives within Indian capital markets, the study contributes to the existing literature and highlights the need for stronger policy support, improved transparency, and broader market participation to accelerate sustainable investment growth in emerging economies.

Suggested Citation

  • Syed Muskan & Jasmine Sandhu & Rohit Kumar Sankhua, 2026. "Green Finance and Sustainable Investment Trends in Indian Capital Markets," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 10(19), pages 563-577, February.
    • Handle: RePEc:bcp:journl:v:10:y:2026:i:19:p:563-577
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    References listed on IDEAS

    as
    1. Gunnar Friede & Timo Busch & Alexander Bassen, 2015. "ESG and financial performance: aggregated evidence from more than 2000 empirical studies," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 5(4), pages 210-233, October.
    2. Jeffrey D. Sachs & Wing Thye Woo & Naoyuki Yoshino & Farhad Taghizadeh-Hesary, 2019. "Why Is Green Finance Important?," ADBI Working Papers 917, Asian Development Bank Institute.
    3. Rui Albuquerque & Yrjo Koskinen & Shuai Yang & Chendi Zhang, 2020. "Resiliency of Environmental and Social Stocks: An Analysis of the Exogenous COVID-19 Market Crash," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 9(3), pages 593-621.
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