THE ROLE OF FINANCIAL INSTITUTIONS IN DECARBONIZATION OF THE ECONOMY: THE EUROPEAN EXPERIENCE AND RECOMMENDATIONS FOR UKRAINE

Introduction. In today's conditions of global challenges related to climate change, the problem of decarbonization of the economy is gaining more and more importance both at international and national levels. A special role in this process is taken by financial institutions, which not only ensure the mobilization of capital for investments in sustainable productions but also actively promote the development of low-carbon technologies and renewable energy. Considering this, the study of the role of financial institutions in the decarbonization process is extremely relevant to ensure an effective transition to sustainable development. This article analyzes the regulatory and legal mechanisms of the EU, the practices of the European financial institutions and financing instruments, in particular the role of green bonds, sustainability-linked loans and investment strategies of influence in decarbonization processes, which can be used in the Ukrainian context. Purpose. The purpose of this study is to determine the critical role of financial institutions in stimulating the decarbonization of the economy, with a special emphasis on the European experience. Analyzing the legal framework, financial mechanisms, and best practices of the countries of the EU, key strategies that can be adapted and implemented in the financial sector of Ukraine, especially in the sphere of involvement of the Ukrainian financial institutions in supporting sustainable economic growth and achieving national and international climate goals, have been determined. Materials and methods. The research materials are 1) regulation of sustainable financing in the European Union; 2) works of domestic scientists who researched sustainable financing and related issues and categories; 3) analytical reports of international organizations, such as the Organization for Economic Cooperation and Development (OECD) and the International Energy Agency (IEA), highlighting the impact of financial institutions on decarbonization processes; 4) practical experience of EU financial institutions regarding the implementation of the decarbonization policy, in particular the European Investment Bank, ING and BlackRock. The following scientific methods were used: theoretical generalization and grouping (when summarizing the challenges and barriers faced by financial institutions in the process of decarbonization, as well as for the development of recommendations for Ukraine regarding the adaptation of European experience); formalization, analysis and synthesis (when researching EU regulations and their impact on financial institutions and sustainable development; combining various aspects of the impact of financial institutions on decarbonization processes and forming conclusions about the role of the regulatory environment; structuring information about specific instruments, such as green bonds and loans related to sustainable development); logical generalization of the results (when formulating research conclusions).