The Paris climate agreement (2015) and the adoption of sustainable development goals (SDG) has paved an innovative way in the field of financing, called the green financing, which focuses on integration of increasingly sustainable approach into future business models. As per the report of United Nations environment program (UNEP-2016), Green finance is a strategy for financial sector which involves investment in various areas aligned with the sustainable development goals. Although, the context differs considerably for different countries. Developing countries, notably those with underdeveloped financial systems, face particular challenges in trade off between economic, environment and social outcomes. Further, as the world moves from Millennium Development Goals (MDG) to Sustainable Development Goals (SDG), the signatories commits finance flows that are consistent with a pathway towards low greenhouse gas emissions and climate resilient development. Most of the developing economies have taken their initial steps towards green finance transition. UNEP and other international organisations are committed to facilitate and speed up this transition process by drawing various strategies, road maps and working closely with developing countries and raising their concerns globally. Furthermore, in India, a number of steps have been taken at both national and international level to move towards green financing  and clean growth which can ensure investment on sustainable development projects without bearing a cost on country’s economic and financial position.  A few public private ventures like India Innovation Lab for Green Finance have also come up to help implement novel solutions for unlocking investment for green infrastructure In India. In the background mentioned above, the present paper highlights the key concerns and barriers for developing countries including India in moving towards greener economy or green financing and green innovations the actions required globally, like national and international collaboration and the needs to provide a thrust to private sector to actively contribute in the green investment and financing. The paper concludes that with the adequate and viable strategies, the developing countries can ensure a better environment and strengthen the financial system and at the same time mitigating the risk involved in financing such projects. Further, the paper reveals that the service coverage of financial sector actors can be extended by identifying and filling gaps which acts as barriers towards green financing transition and a greener environment and thus ensure a clean and sustainable growth rate.

KEYWORDS: Sustainable Development, Green Financing, Green Investment, Greener Economy.