The Regulatory Dynamics of Sustainable Finance: Paradoxical Success and Limitations of EU Reforms.

The fnancial sector has seen a transformation towards ‘sustainable’ fnance particularly in Europe, driven also by unprecedented regulatory reforms. At the same time, many are sceptical about the real impact of these reforms, fearing that they are triggering a paradoxical fnancialisation of sustainability. Building on recent research on institutional logics and institutional felds formation, we examine changes in the EU regulatory dynamics as characterised by shifts in framing the relationship between sustainability and fnance. Deploying a longitudinal approach (2009–2019), consisting of archival data and semi-structured interviews, we explore the development of EU sustainable fnance regulation as an extended, interactive and contested process. Specifcally, we suggest that regulatory dynamics depend on the hybrid confguration of the social constituencies supporting sustainable fnance reforms and on shifts in the overall prevalence of the fnancial logic in society. Our paper sheds light on the inherent contradictions and limitations of sustainable fnance as a means for transformative sustainability reforms. 

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