Mainstreaming Sustainable Finance: A Study of an Emerging Instituion and the Organisations that Shape It

Abstract

Climate change is the most challenging issue of our time. The extreme weather events that are the outcome of global warming is predicted to cause major financial damage creating financial crisis, which will impact the living standards if we do not reduce the emissions. Sustainable Finance (SF) has a vital role to play in mobilising the funds for the green transition and ensuring that the future investments are focused on sustainable assets and renewable energy. SF is an emerging institution where the ideas that construct it differ widely.
This contribution sets out to identify the current SF ideas and map the organisations attempting to exercise the control over the emerging issue, guided by the research question “How does Sustainable Finance discourse appear in the different Scandinavian countries and the EU, and who are the actors that influence the creation of these ideas?" As the field under study is highly nascent, understanding the current discourse as well as organisations shaping it will provide insight to how do emerging institutions form. To get individual perceptions, the EU and three Scandinavian countries will be analysed separately, and eventually joined in the overall network. To discover the discourse this thesis employs Topic Modelling to identify the ideas in the documents collected, and then qualitative means to explore those ideas through the key words produced by the Topic Modelling. Furthermore, to provide an understanding of which organisations are at the core of shaping the ideas and are brokers or epistemic arbiters the study employs a Social Network Analysis where 223 actors are connected through 5681 ties in the space of the SF discourse.
Four main findings stand out. First, we discover that the common trait between the EU and the three countries is a tendency to focus on the economic growth, and that this usually evolves around the energy sector as having the biggest potential within sustainability. Second, the three Scandinavian countries present different ideas for the energy solutions. This is argued to be because of different institutional contexts in the countries. Denmark has a well-established infrastructure for the wind energy solutions, which is ought to increase their competitiveness in the international energy market. Norway is using the existing expertise in oil technology to develop new energy solutions, inter alia, carbon capture storage. While Sweden is phasing away from nuclear power and looking into wind and hydro power solutions. Third, we experience private sector dominance in the SF discourse. Lastly, we find that the emerging nature of SF creates space for manipulation and conflict in the issue control, thus leading to incoherence and confusion in the institution.