Ecofinancing causes or motivates businesses to adhere to environmentally friendly business practices and technologies through financial leverage. The underlying concept is that funds and related opportunities are available to only ventures that are environment friendly or meet environmental protection requirements. The three major vehicles for ecofinancing are: 1) lending and investment funds; 2) government-initiated environment-related subsidies and funds; and 3) mechanisms related to international agreements. The ecofinancing concept is under the broad concept of sustainable financing, also known as sustainable and responsible financing, which advocates financial leverage to promote business practices to safeguard social justice, protect the environment, and reduce poverty.

Due to the growing awareness among consumers and investors of the need to protect the environment and reduce mitigation costs, ecofinancing is becoming an effective investment-related tool. The size of the ecofinance market in Europe and the USA is steadily increasing. However, in Asia it is still a comparatively new concept.