When It Comes to Making Finance Truly Sustainable, the Devil Is in the Details

GEM-STONES Policy Briefs. AGORA Forum, March 2020

Executive Summary

Sustainable finance is an emerging policy issue. Therefore, the design of “technical instruments” like indicators and definitions that provide the background for policies matters greatly. However, believes about what sustainable finance is and should do as well as interests are reflected in these seemingly technical instruments.
Thus, it is important to unpack these instruments, so that the debate can be brought to a political level.
In the following, I link technical instruments to four communities that have been active in the field of sustainable finance over the last 20 years. These communities are bound together by a common framing. First, there is the historically important, but today marginal community of ethical investors. Second, I describe the actors that emphasise the addition of sustainability issues to the financial risks and opportunities calculus. This frame has dominated the issue throughout the period under analysis. Third, I introduce the climate finance frame, which highlights the need to issue new green financial instruments. Finally, I revisit the critical frame, which advances a systemic criticism of finance.