Instruments of financing sustainable development projects

Subject. The article is devoted to the analysis of instruments for financing sustainable development. Objectives. The purpose of the study is to reveal the main characteristics of instruments used to finance projects in the field of sustainable development, identify trends and constraints in the sustainable finance market. Methods. The study employs general scientific methods, like retrospective, comparative analysis, data synthesis. Results. The paper analyzes traditional (green, social, sustainable bonds, green and sustainable development-related loans) and innovative (transition, forest, blue bonds, carbon, mixed financing) instruments for financing sustainable development. It presents the volumes of the specified instruments in dynamics, and unveils market constraints on sustainable development finance. These include the lack of uniform standards, high costs of integrating ESG principles into companies' activities, the difficulty of estimating the effectiveness of sustainable investments, etc. Conclusions. The analysis shows that the sustainable finance market has significant potential for further expansion. The volume of issued sustainable financial instruments is increasing steadily, although the growth rates vary across periods and segments. The State should actively participate in the formation of institutional environment for sustainable investment and creation of incentives for businesses to implement ESG projects.