Sustainable-Finance Taxonomies and Capital Allocation

This review examines sustainable-finance taxonomies and capital allocation. The organizing question is whether classification rules change investment decisions, financing costs, transition plans, and greenwashing incentives. Ten related scholarly sources are synthesized through a decision-centered framework spanning problem definition, mechanism, measurement, evaluation, implementation, and governance. The review does not invent experiments, pooled estimates, or unreported quantitative results. It instead evaluates the strength and transferability of the available evidence, with particular attention to equating taxonomy alignment with realized environmental impact. The resulting framework links technical or empirical performance to explicit use conditions and identifies tests that should precede wider adoption in financial regulation and transition investment.

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