Quo Vadis Sustainable Finance? Drivers and Barriers to Green Finance Trends in the Western Balkans

This article is in convergence with the newest and most trending movements of the last decades related to the reduction of pollution, created by the business sector on a global scale, as well as to the minimization of climate change. The contribution of this paper will be in terms of the operation of green finance in the framework of the sustainable economy, as well as to the results it produces. The main purpose of this study is to evaluate the real possibilities of the institutional operations of what is proclaimed on the grounds of creating preconditions for green financing. For this purpose, the sample of the Western Balkans countries has been considered for examining the sustainability of green finances. The research first reviews the latest theoretical framework related to the applicability of green finances in transition economies. Through analysis, was gathered evidence of internal and external drivers that justify green financing as an efficient input of a sustainable economy. The influence of state institutions through establishing regulations and laws that stimulate private sector developments in the transition economy through green financing as the first impetus is reviewed. The issues related to climate challenges suggested by the Kyoto Protocol are summarized. Meanwhile, the last impetus is the considerable influence of the EU, stimulating alignment with European regulatory standards, as a prerequisite for membership. Meanwhile, the results suggest that although numerous projects and funding’s were dedicated to the green finance development path, these countries are lagging mostly on the implementation of green finance infrastructure, thus we cannot look forward to more substantial development.