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

Authors
  • Ahlström, Hanna1
  • Monciardini, David2
  • 1 Royal Swedish Academy of Sciences,
  • 2 University of Exeter Business School,
Type
Published Article
Journal
Journal of Business Ethics
Publisher
Springer-Verlag
Publication Date
Feb 24, 2021
Pages
1–20
Identifiers
DOI: 10.1007/s10551-021-04763-x
PMID: 33642657
PMCID: PMC7903038
Source
PubMed Central
Keywords
License
Unknown

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. Supplementary Information The online version contains supplementary material available at 10.1007/s10551-021-04763-x.

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