# Transition Finance

*ESG & Sustainable Finance — Finicade finance glossary*

Transition finance funds high-emitting companies to decarbonise, rather than excluding them. The argument for it is arithmetic: steel, cement and shipping produce a large share of global emissions and cannot be divested into non-existence, so the emissions that matter most are in exactly the companies exclusion screens remove. The risk is that the label funds delay dressed as transition.

**Also known as:** transition bonds, brown to green finance

**Related terms:** [Sustainability-Linked Loan](https://finicade.com/glossary/sustainability-linked-loan), [Green Bond](https://finicade.com/glossary/green-bond), [Transition Risk](https://finicade.com/glossary/transition-risk), [Stranded Asset](https://finicade.com/glossary/stranded-asset), [Net Zero](https://finicade.com/glossary/net-zero)

Source: https://finicade.com/glossary/transition-finance