Furkan Ahmad, Ameni Boumaiza, Antonio Sanfilippo, Luluwah Al‐Fagih
In this state-of-the-art review, the multifaceted role of Green Finance (GF) is examined in light of the potential for net-zero energy development. It begins by mapping the global landscape of green finance, its underlying concepts, guiding principles and evolving instruments (debt, equity and blended models). It then examines how green finance policies stimulate green innovation via direct, indirect and spatial spillovers. Building on this foundation, the review analyzes the multifaceted impact of green finance on the net-zero transition: it deepens clean-technology progress, broadens financing channels, and reshapes energy systems by enhancing efficiency, restructuring supply mixes, stabilizing grids and expanding access. A focused assessment of green-finance tools (taxation, trade openness and technological incentives) reveals their effectiveness in improving renewable-energy investment efficiency. Further, the paper identifies key challenges such as data gaps, policy fragmentation and market barriers. In the final section, “Future Outlook and Strategic Roadmap,” we provide actionable recommendations to overcome these challenges, scale adoption, and amplify GF's role in advancing renewable energy and long-term sustainability. We also outline priority policy levers including harmonized taxonomies and disclosure standards, scaled concessional/blended finance to de-risk investments in the Global South, and strengthened independent verification and highlight how digital platforms and capacity building can lower transaction costs and attract institutional capital at the pace required for a just and resilient net-zero transition.