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INTERNATIONAL JOURNAL OF ADVANCED RESEARCH IN COMMERCE, MANAGEMENT & SOCIAL SCIENCE (IJARCMSS) [ Vol. 9 | No. 4 (I) | October - December, 2026 ]

Financial Literacy and Green Finance: A Systematic Literature Review

Aditi Kathuria

Investments in green projects have become important in the present era due to environmental concerns and the need for sustainable development has arisen. However, the participation of individuals is limited when green projects or green investing is concerned. Financial literacy is one of the reasons which may influence investment in green projects as individuals with financial awareness and financial knowledge are able to make informed investment decisions. It may also depend on individual’s willingness and understanding to invest in green projects. This study will be focusing on examining the relationship between financial literacy and green finance and what factors are held responsible for boosting green investment decision making among individuals. A systematic literature review approach is adopted by examining existing literature from 2010 to 2026 which focuses on sustainable financial literacy, green finance, financial literacy and the factors affecting green investment decision making such as policies awareness, government policies effectiveness, financial awareness programs, environmental awareness and many more. Based upon the literature review, it concludes that financial literacy has strong relationship with green finance but financial literacy is not the only factor which influences green finance there are various other factors which influences investments in green projects like policy awareness, government subsidies, digital financial literacy, sustainable financial literacy, environment awareness, policies effectiveness and fintech adoption. This study also suggests the policymakers to make effective policies which makes active participation in green projects. Secondly, financial education programs should be implemented for adults as well as financial literacy must be taught as a subject to every child through formal mode of education. Thus, this study helps in understanding the factors which influence the relationship between financial literacy and green finance identifies the areas for future research.

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