Corporate Reporting in the Governance of Climate Transition: Framing agency in a financialized world

This thesis explores the role of external corporate reporting in the governance of climate transition to a low-carbon world as committed in the Paris Climate Agreement. It does so by examining the work of the Task Force on Climate‐Related Financial Disclosures (TCFD Task Force) and their disclosure framework ‐ TCFD recommendations – which introduced a new accounting concept: transition risk. By focusing on the concept of transition risk, and conceptualizing TCFD framework as a constitutive accounting technology, the study describes the framework’s role in enabling a novel problematization around the governance transition while bringing into being a setting around its management through materializing new accounting objects and subjects.
Specifically, the TCFD framework is conceptualized as a financialized technology, aligning with accounting scholarship that emphasizes the growing dominance of financialized reasoning in reporting rules and formats. However, while previous studies have primarily focused on demonstrating how financial logic infiltrates spaces and practices that were previously considered free from its influence, this present study delves into the socio-material processes involved in assigning financial meaning to things and how this process evolves over time. It does so by posing the question: How does the TCFD framework shape the financial signification within the context of climate transition? In doing so, the study shifts its attention from the existing literature's emphasis on documenting the increasing impact of financial logic on reporting practices to examining the role of reporting in framing financialized agency, understood as the capacity to act and assign meaning to action. Consequently, the thesis theorizes financial signification as a practical achievement that requires socio-material organizing to facilitate the creation and expression of knowledge claims from a financialized perspective.
Theoretically, to study financial signification as a process, the thesis draws upon constructivist market studies from where the key analytical concepts are derived: financialized agencement and valuation device. Specifically, by using an Actor-Network Theory-informed issue-centric method, it traces the gradual evolution of financialized arrangements devised as a solution for managing financial risks arising from transition, and the role of the TCFD in such assembling. This exploration includes examining historical events that contributed to the TCFD framework's influential status and its subsequent impact on the governance of transition, with a specific focus on reporting rulemaking.
The primary conclusion of this thesis is that the TCFD has played a pivotal role in the formation of what this study names as the agencement of transition stewardship. Through such an agencement, a new type of market actor is constructed and brought into life in the context of climate transition – an investor figure made concerned of and equipped to evaluate the financial value effects of transition. Furthermore, the thesis describes how the recommendations format the ontological making of markets in transition as envisioned amid the Paris Climate Agreement.
Consequently, the thesis argues that the TCFD has constituted a powerful engine in the climate governance-markets nexus, where it is no longer possible to disentangle previously distanced issues of financial reporting, accounting standards, climate negotiations, transition policies, and various financial market actors with their respective market devices. By engaging with these findings and the distributed, relational, and performative qualities of the agencement of transition stewardship, the study challenges common critiques of the financialization of reporting as an enclosing, progressively forward-moving force, where emancipatory possibilities are seen to lie outside the financialized gaze. Instead, the study illuminates the various nodes within financialized arrangements through which transformative change can be evoked in a financialized and climate-changed world.