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Sustainable finance. A critical realist perspective

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  • Lagoarde-Segot, Thomas

Abstract

This article seeks to respond to certain epistemological challenges which are posed to the traditional methods of inquiry used in finance by the emergence of sustainable finance. We first underline the qualitative changes that have been induced in the finance function by the imperatives of sustainable finance. Then, through the prism of critical realism, we analyse it to reveal a contradiction, which we attribute to a misconceived social ontology in academic finance. Finally, we outline methodological avenues which might allow us to overcome these difficulties and pave the way for a more realist and pluralist approach to finance research in the 21st century.

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  • Lagoarde-Segot, Thomas, 2019. "Sustainable finance. A critical realist perspective," Research in International Business and Finance, Elsevier, vol. 47(C), pages 1-9.
    • Handle: RePEc:eee:riibaf:v:47:y:2019:i:c:p:1-9
    DOI: 10.1016/j.ribaf.2018.04.010
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    1. Christophe Revelli & Jean-Laurent Viviani, 2015. "Financial performance of socially responsible investing (SRI): what have we learned? A meta-analysis," Post-Print halshs-01141295, HAL.
    2. Walter, Christian, 2016. "The financial Logos: The framing of financial decision-making by mathematical modelling," Research in International Business and Finance, Elsevier, vol. 37(C), pages 597-604.
    3. Lagoarde-Segot, Thomas, 2015. "Diversifying finance research: From financialization to sustainability," International Review of Financial Analysis, Elsevier, vol. 39(C), pages 1-6.
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    5. Fabian Muniesa, 2014. "The Provoked Economy," Post-Print halshs-01113031, HAL.
    6. Thomas Lagoarde-Segot, 2014. "La finance solidaire. Un humanisme économique," Post-Print hal-01474279, HAL.
    7. Schinckus, Christophe, 2015. "Positivism in finance and its implication for the diversification finance research," International Review of Financial Analysis, Elsevier, vol. 40(C), pages 103-106.
    8. Eric Neumayer, 2013. "Weak versus Strong Sustainability," Books, Edward Elgar Publishing, number 14993.
    9. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    10. Dupré, Denis & Perluss, Preston, 2016. "Mastering risks: An illusion," Research in International Business and Finance, Elsevier, vol. 37(C), pages 620-628.
    11. Lagoarde-Segot, Thomas, 2015. "Diversifying finance research: From financialization to sustainability," International Review of Financial Analysis, Elsevier, vol. 39(C), pages 1-6.
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    Cited by:

    1. Christian Walter, 2020. "Sustainable Financial Risk Modelling Fitting the SDGs: Some Reflections," Sustainability, MDPI, vol. 12(18), pages 1-28, September.
    2. Amalia Rodrigo-González & Alfredo Grau-Grau & Inmaculada Bel-Oms, 2021. "Circular Economy and Value Creation: Sustainable Finance with a Real Options Approach," Sustainability, MDPI, vol. 13(14), pages 1-30, July.
    3. Zhang, Dongyang, 2023. "Does green finance really inhibit extreme hypocritical ESG risk? A greenwashing perspective exploration," Energy Economics, Elsevier, vol. 121(C).
    4. Francesco Rania & Annarita Trotta & Rosella Carè & Maria Cristina Migliazza & Abdellah Kabli, 2020. "Social Uncertainty Evaluation of Social Impact Bonds: A Model and Practical Application," Sustainability, MDPI, vol. 12(9), pages 1-34, May.
    5. Johannes Lundberg, 2022. "Agency Theory’s “Truth Regime”: Reading Danish Pension Funds’ Decisions Regarding Shell from the Perspective of Agency Theory," Sustainability, MDPI, vol. 14(22), pages 1-15, November.
    6. Thomas Lagoarde-Segot, 2020. "Financing the Sustainable Development Goals," Sustainability, MDPI, vol. 12(7), pages 1-22, April.
    7. Andrikopoulos, Andreas, 2020. "Delineating social finance," International Review of Financial Analysis, Elsevier, vol. 70(C).
    8. Abdellah Kabli & Alessandro Rizzello & Annarita Trotta, 2021. "Roadmapping New Impact Bonds in a Post-COVID World: Insights from Case Studies in the Education Sector," Sustainability, MDPI, vol. 13(8), pages 1-16, April.
    9. Alessandro Rizzello & Abdellah Kabli, 2020. "Sustainable Financial Partnerships for the SDGs: The Case of Social Impact Bonds," Sustainability, MDPI, vol. 12(13), pages 1-22, July.
    10. Chi-Wei Su & Xu-Yu Cai & Ran Tao, 2020. "Can Stock Investor Sentiment Be Contagious in China?," Sustainability, MDPI, vol. 12(4), pages 1-16, February.
    11. Carè, R. & Weber, O., 2023. "How much finance is in climate finance? A bibliometric review, critiques, and future research directions," Research in International Business and Finance, Elsevier, vol. 64(C).
    12. Lagoarde-Segot, Thomas & Martínez, Enrique A., 2021. "Ecological finance theory: New foundations," International Review of Financial Analysis, Elsevier, vol. 75(C).
    13. Helen Chiappini & Gianfranco Vento & Leonardo De Palma, 2021. "The Impact of COVID-19 Lockdowns on Sustainable Indexes," Sustainability, MDPI, vol. 13(4), pages 1-18, February.
    14. Galletta, Simona & Mazzù, Sebastiano & Naciti, Valeria, 2022. "A bibliometric analysis of ESG performance in the banking industry: From the current status to future directions," Research in International Business and Finance, Elsevier, vol. 62(C).

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    More about this item

    Keywords

    Finance; Sustainability; Epistemology;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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