Channels of influence in sustainable finance

A framework for conceptualizing how private actors shape the green transition

Bibliographic Data

ID4495259
AuthorsJan Fichtner (0000-0001-7675-400X, Witten/Herdecke University, corresponding author), Simon Schairer (0009-0007-2241-7025, Witten/Herdecke University), Paula Haufe (0000-0002-9044-403X, Witten/Herdecke University), Nicolás Aguila (0000-0002-9002-4502, Witten/Herdecke University), Riccardo Baioni (0009-0008-9238-6233, Witten/Herdecke University), Janina Urban (Witten/Herdecke University), Joscha Wullweber (0000-0003-1928-1933, Witten/Herdecke University)
Year2025
Volume11
Issue1
Pages56-80
Publication date2025-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueFinance and Society (JOURNAL)
Journal identifiersISSN: 2059-5999 • E-ISSN: 2059-5999
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/fas.2024.24
OpenAlexW4406849218
LanguageEN
Citations received8
References cited66

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

Business · Chemistry · Sustainable Finance and Green Bonds

Tools

Open DOIOpen Access