Financial Markets and the Transition to a Low-Carbon Economy: Challenging the Dominant Logics

Céline Louche (), Timo Busch, Patricia Crifo and Alfred Marcus
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Timo Busch: UHH - Universität Hamburg = University of Hamburg
Alfred Marcus: UMN - University of Minnesota [Twin Cities] - UMN - University of Minnesota System

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Abstract: Financial markets play a major role in contributing to the transition to a low-carbon economy. Although many initiatives and developments are taking place, this is just the beginning. In this article, we argue for a theory of change—a theory rooted in logics that will help financial markets play a key role in the transition to a low-carbon economy. We argue that the current dominant logics in finance—short-termism, predictability of the future based on ex-post data, price efficiency, and risk-adjusted returns—impede the effective integration of climate considerations in financial markets. We suggest four alternative logics that can enable and foster a change toward the low-carbon economy: long-termism, systems interconnectedness, carbon price dynamics, and active ownership.

Keywords: financial markets; climate change; low-carbon economy; theory of change (search for similar items in EconPapers)
Date: 2019-02-13
Note: View the original document on HAL open archive server: https://audencia.hal.science/hal-02016756v1
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Citations: View citations in EconPapers (23)

Published in Organization & Environment, 2019, 32 (1), pp.3-17. ⟨10.1177/1086026619831516⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02016756

DOI: 10.1177/1086026619831516

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