Sustainability finance aims to provide financial resources to support environmentally friendly activities and projects, such as renewable energy, sustainable agriculture, air quality improvement, and biodiversity protection, etc. This chapter begins by explaining the fundamental principles of the discipline and then distinguishes sustainability finance from other finance activities in terms of its objectives, functions, and methodology. The chapter then addresses emerging policy initiatives, fiscal tools, market frameworks, and standards on various forms of sustainability finance instruments. The focus is on carbon finance although other sustainability and environmental issues (e.g. water consumption) are also considered. Finally, the chapter discusses the adoption of innovative instruments, such as carbon credits, green bonds, and decentralized electricity markets, that unlock the potential for green investment and finance. By drawing on real-life practices, the chapter illustrates how financial instruments can play a critical role to enhance managerial green capacity, market competitiveness, and climate and environmental resilience.