The evolution of sustainable finance: innovations, policies, and global cooperation for financial system transformation

This study investigates the evolution of sustainable finance research through a comprehensive systematic literature review and advanced topic modeling analysis to identify developmental stages, thematic dimensions, and emerging trends in the field. We conducted a systematic literature review following PRISMA guidelines, analyzing 1256 studies (1098 peer-reviewed) published from 1974 to 2024. Our methodology combines bibliometric analysis with BERTopic modeling to identify patterns of thematic evolution. The BERTopic model was validated using multiple coherence metrics (C_V: 0.523) and expert validation by five domain specialists to ensure reliability and interpretability. The analysis reveals three distinct evolutionary phases: emergence (1974–1995), integration (1995–2015), and transformation (2015–2024). Twelve major thematic domains were identified and validated, clustered into three primary dimensions: (1) Market Mechanisms and Financial Instruments (47.3% of literature), (2) Risk Management and Regulatory Frameworks (28.7%), and (3) Innovation and Financial Inclusion (24.0%). The study identifies significant acceleration in research output post-2015, coinciding with the Paris Agreement and major regulatory initiatives. While existing frameworks from OECD and UNEP FI provide institutional perspectives, there is a lack of a comprehensive, data-driven analysis of the intellectual evolution of sustainable finance research that combines temporal dynamics with thematic depth across the entire field's development spanning five decades. This study contributes by (1) providing the first large-scale computational analysis of sustainable finance literature evolution using advanced topic modeling, (2) introducing an empirically derived three-dimensional framework for understanding field development with statistical validation, (3) identifying key temporal inflection points and their policy drivers through change point analysis, and (4) establishing a methodological foundation for continuous monitoring of emerging trends in sustainable finance research. The findings suggest that sustainable finance has reached a critical inflection point, transitioning from peripheral environmental considerations to core financial system integration, with implications for policy coordination, market development, and future research prioritization in the context of global climate and sustainability challenges.