Channels of influence in sustainable finance: A framework for conceptualizing how private actors shape the green transition
Since the Paris Agreement, interest in decarbonization and sustainable finance has grown rapidly. Within the prevalent derisking regime, investment for decarbonization must come predominantly from the private sector. However, growth in ‘sustainable finance’ assets is not necessarily causing more sus...
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| Format: | Article |
| Language: | English |
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Cambridge University Press
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| Series: | Finance and Society |
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| Online Access: | https://www.cambridge.org/core/product/identifier/S2059599924000244/type/journal_article |
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| author | Jan Fichtner Simon Schairer Paula Haufe Nicolás Aguila Riccardo Baioni Janina Urban Joscha Wullweber |
| author_facet | Jan Fichtner Simon Schairer Paula Haufe Nicolás Aguila Riccardo Baioni Janina Urban Joscha Wullweber |
| author_sort | Jan Fichtner |
| collection | DOAJ |
| description | Since the Paris Agreement, interest in decarbonization and sustainable finance has grown rapidly. Within the prevalent derisking regime, investment for decarbonization must come predominantly from the private sector. However, growth in ‘sustainable finance’ assets is not necessarily causing more sustainability-advancing productive investment to drive the green transition. We thus argue that sustainable finance is not exclusively about investing or providing finance, but crucially also about changing corporate practices toward greater sustainability. To shed light on how private financial actors can influence sustainability in a derisking context and to facilitate this broader research perspective on sustainable finance, we introduce the conceptual framework of ‘channels of influence’. These channels are different strategies and mechanisms used by private actors that influence the behavior of financial and non-financial corporations to increase financial flows to sustainable productive investments. We identify ten channels of influence concerning sustainable finance: (1) initial financing; (2) refinancing; (3) (re)insurance; (4) ratings; (5) climate-litigation; (6) company engagement; (7) divestment; (8) reputation; (9) coalition-building; and (10) standard-setting. These are grouped according to the specificity and breadth of their sustainability impact. Using these channels enables private actors to advance sustainability within the status quo of state-market relations and regulation. |
| format | Article |
| id | doaj-art-40cdd0b901564639a1ba20c8f44cea7d |
| institution | Kabale University |
| issn | 2059-5999 |
| language | English |
| publisher | Cambridge University Press |
| record_format | Article |
| series | Finance and Society |
| spelling | doaj-art-40cdd0b901564639a1ba20c8f44cea7d2025-01-27T07:17:37ZengCambridge University PressFinance and Society2059-599912510.1017/fas.2024.24Channels of influence in sustainable finance: A framework for conceptualizing how private actors shape the green transitionJan Fichtner0https://orcid.org/0000-0001-7675-400XSimon Schairer1Paula Haufe2Nicolás Aguila3Riccardo Baioni4Janina Urban5Joscha Wullweber6Witten/Herdecke University, Witten, GermanyWitten/Herdecke University, Witten, GermanyWitten/Herdecke University, Witten, GermanyWitten/Herdecke University, Witten, GermanyWitten/Herdecke University, Witten, GermanyWitten/Herdecke University, Witten, GermanyWitten/Herdecke University, Witten, GermanySince the Paris Agreement, interest in decarbonization and sustainable finance has grown rapidly. Within the prevalent derisking regime, investment for decarbonization must come predominantly from the private sector. However, growth in ‘sustainable finance’ assets is not necessarily causing more sustainability-advancing productive investment to drive the green transition. We thus argue that sustainable finance is not exclusively about investing or providing finance, but crucially also about changing corporate practices toward greater sustainability. To shed light on how private financial actors can influence sustainability in a derisking context and to facilitate this broader research perspective on sustainable finance, we introduce the conceptual framework of ‘channels of influence’. These channels are different strategies and mechanisms used by private actors that influence the behavior of financial and non-financial corporations to increase financial flows to sustainable productive investments. We identify ten channels of influence concerning sustainable finance: (1) initial financing; (2) refinancing; (3) (re)insurance; (4) ratings; (5) climate-litigation; (6) company engagement; (7) divestment; (8) reputation; (9) coalition-building; and (10) standard-setting. These are grouped according to the specificity and breadth of their sustainability impact. Using these channels enables private actors to advance sustainability within the status quo of state-market relations and regulation.https://www.cambridge.org/core/product/identifier/S2059599924000244/type/journal_articlechannels of influencederisking regimefinancial marketsgreen transitionsustainable finance |
| spellingShingle | Jan Fichtner Simon Schairer Paula Haufe Nicolás Aguila Riccardo Baioni Janina Urban Joscha Wullweber Channels of influence in sustainable finance: A framework for conceptualizing how private actors shape the green transition Finance and Society channels of influence derisking regime financial markets green transition sustainable finance |
| title | Channels of influence in sustainable finance: A framework for conceptualizing how private actors shape the green transition |
| title_full | Channels of influence in sustainable finance: A framework for conceptualizing how private actors shape the green transition |
| title_fullStr | Channels of influence in sustainable finance: A framework for conceptualizing how private actors shape the green transition |
| title_full_unstemmed | Channels of influence in sustainable finance: A framework for conceptualizing how private actors shape the green transition |
| title_short | Channels of influence in sustainable finance: A framework for conceptualizing how private actors shape the green transition |
| title_sort | channels of influence in sustainable finance a framework for conceptualizing how private actors shape the green transition |
| topic | channels of influence derisking regime financial markets green transition sustainable finance |
| url | https://www.cambridge.org/core/product/identifier/S2059599924000244/type/journal_article |
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