Integration of sustainable finance principles into public budget policy

Abstract

The relevance of the study lies in the need to rethink the role of the state budget in the context of the transition to a sustainable development model, in which financial decisions should ensure not only fiscal balance but also social justice, environmental responsibility, and economic modernization. Strengthening transparency requirements for public finances, adapting to European management standards, and implementing the UN Sustainable Development Goals require a scientific understanding of mechanisms for integrating sustainable financing principles into Ukraine's state budget policy. The purpose of the article is to scientifically substantiate conceptual and applied approaches to integrating the principles of sustainable financing into state budget policy to enhance the socio-economic and environmental sustainability of the state's development. The research methodology is based on the application of systemic, institutional, and comparative approaches, as well as methods of structural and functional analysis, synthesis, induction, and deduction, which allowed us to generalize national and international experience in implementing sustainable financing and to determine the directions of its implementation in domestic budget practice. Results. It is established that the state budget can serve as a strategic mechanism for implementing environmental, social and economic priorities of sustainable development. The main regulatory, institutional, and organizational barriers that hinder this process are identified: the lack of legally established criteria for «green» budgeting, insufficient coordination among participants in the budget process, limited digital analytics, and a low level of assessment of the environmental effects of expenditures. The need to integrate sustainability indicators into medium-term planning, to introduce «green» labelling for budget expenditures, and to develop result-oriented financing instruments is proven. Conclusions. It is proven that integrating sustainable financing principles increases the efficiency of public resource use and creates long-term conditions for environmental security, social cohesion, and economic stability. Prospects for further research include developing a national methodology to assess the sustainability of budget programs, creating a digital platform to track environmental and social impacts, and standardizing reporting in line with international principles of sustainable financing.