Green Finance and Fast Fashion: A Systematic Literature Review of Opportunities, Barriers, and Pathways Toward Sustainable Transformation

Abstract

Background: The fast fashion industry, one of the world's most environmentally and socially destructive sectors, is under escalating pressure to adopt sustainable finance mechanisms. Despite the rapid global expansion of green finance instruments - including green bonds, sustainability-linked loans (SLLs), and ESG-integrated portfolios - their systematic application within the fast fashion sector remains fragmented, undertheorized, and empirically underdeveloped. The urgency is amplified by the sector's disproportionate contribution to global greenhouse gas emissions, water pollution, and labor exploitation in developing economies. Objective: This study systematically reviews peer-reviewed literature at the intersection of green finance and fast fashion, identifying key opportunities, structural barriers, and theoretically grounded pathways toward sustainable industry transformation. The review also maps bibliometric trends and research gaps to guide future scholarly inquiry. Method: A Systematic Literature Review (SLR) following the PRISMA 2020 framework was conducted using the Scopus database. A total of 1,247 records were identified; after rigorous screening based on pre-established inclusion and exclusion criteria and inter-rater reliability assessment (Cohen's κ = 0.87), 42 peer-reviewed articles published between 2013 and 2024 were included for final synthesis. Thematic analysis was conducted following Braun and Clarke's (2006) framework, structured around three guiding research questions. Results: The review reveals a growing yet asymmetric body of literature, with ESG performance and financial performance receiving the most attention, while green bond adoption and climate finance mechanisms remain nascent within the fashion sector. Social performance (S-pillar) demonstrates the most robust and consistent positive association with both market-based and accounting-based financial outcomes. Structural barriers - including regulatory fragmentation, greenwashing risks, information asymmetry, and supply chain opacity - substantially impede green finance adoption. Creditor-oriented financial systems exhibit stronger ESG signaling effects than investor-oriented systems. Bibliometric analysis reveals a sharp increase in publication volume post-2020, reflecting heightened institutional and regulatory attention. Emerging thematic clusters encompass circular economy finance, digital traceability, and climate risk disclosure. Conclusion: Green finance represents a viable and increasingly imperative pathway for transforming the fast fashion industry toward environmental and social sustainability. Realizing this potential requires multi-stakeholder institutional alignment, credible ESG disclosure infrastructure, fashion-specific financial This is an open-access article distributed under the terms of CC BY License 104instruments, and coherent regulatory frameworks. Future research should examine longitudinal causal mechanisms, digital technology enablers