Divergent Paths, Shared Goals: Green Finance Development in the V4 Countries

Abstract

Green finance has long been the cornerstone of sustainable development, with mechanisms and financial instruments serving to support low-carbon growth and climate resilience. This article considers the evolution of green finance in the Visegrad Four nations (the Czech Republic, Hungary, Poland, and Slovakia) and how they compare regarding progress, challenges, and alignment with European Union sustainability objectives.Though they have a shared past and dependence on fossil fuels, the V4 countries are all growing at different rates. Poland pioneered the issuance of the world's first sovereign green bond in 2016 and remains at the forefront with new-bank innovative products and high levels of government participation. Hungarian growth is spearheaded by the Hungarian Central Bank, which has launched green mortgage bonds and regulatory incentives to introduce environmental, social, and governance (ESG) considerations into financial markets. The Czech Republic has focused on establishing regulatory pillars, but implementation is slow and fragmented. Slovakia, on the other hand, relies on EU funding and national government schemes as well, with minimal domestic green financial tools. The analysis highlights both opportunities and barriers. While EU frameworks such as the Green Deal and Taxonomy Regulation provide strong incentives, national disparities in regulatory capacity, private sector engagement, and market maturity hinder convergence. Key challenges include reliance on fossil fuels, information asymmetries, and limited awareness among businesses and households. The study concludes that greater regional cooperation, increased transparency, and the development of cross-border financing mechanisms could strengthen the V4’s green transition. A joint V4 Green Bond Fund and ESG-focused education initiatives are proposed as pathways to accelerate sustainable finance in the region. Ultimately, effective green finance can deliver long-term environmental, economic, and social benefits, positioning the V4 countries as competitive actors in Europe’s shift toward climate neutrality.