2. Defining Green Finance: Existing Standards and Main Challenges

The issue of clearly defining green finance is not a secondary one. On the contrary, it is central to the debate surrounding the future of the market. In this respect, this chapter provides an assessment of the questions linked to the lack of a clear definition of green finance and of the risk associated. The main approaches today in use in the financial industry for determining which sectors are eligible for green funding are first reviewed. Hence, the main principles adopted to label a financial security as “green” are discussed, in particular as concerns green bonds and green loans. Finally, the different external review options and the risk of greenwashing are treated.