The Regulatory Dynamics of Sustainable Finance: Paradoxical Success and Limitations of EU Reforms

Hanna Ahlström () and David Monciardini ()
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Hanna Ahlström: Royal Swedish Academy of Sciences
David Monciardini: University of Exeter Business School

Journal of Business Ethics, 2022, vol. 177, issue 1, No 11, 193-212

Abstract: Abstract The financial sector has seen a transformation towards ‘sustainable’ finance particularly in Europe, driven also by unprecedented regulatory reforms. At the same time, many are sceptical about the real impact of these reforms, fearing that they are triggering a paradoxical financialisation of sustainability. Building on recent research on institutional logics and institutional fields formation, we examine changes in the EU regulatory dynamics as characterised by shifts in framing the relationship between sustainability and finance. Deploying a longitudinal approach (2009–2019), consisting of archival data and semi-structured interviews, we explore the development of EU sustainable finance regulation as an extended, interactive and contested process. Specifically, we suggest that regulatory dynamics depend on the hybrid configuration of the social constituencies supporting sustainable finance reforms and on shifts in the overall prevalence of the financial logic in society. Our paper sheds light on the inherent contradictions and limitations of sustainable finance as a means for transformative sustainability reforms.

Keywords: Sustainable finance; Responsible investors; Civil society; Institutional logics; EU policy (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10551-021-04763-x

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