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Financialisation of the environment; A literature review


  • Eric Clark

    (Lund University, Department of Human Geography)

  • Kenneth Hermele

    (Lund University, Department of Human Geography and Human Ecology Division)


This paper provides a review of research into financialisation of the environment, focusing on the role of financialisation in the interface between social and natural dimensions of sustainability, the geographical penetration of finance into environmental sectors, and its increasing control over the production of nature and environmental governance through regulating flows of capital and consequently material flows. Financialisation is conceptualised as a profoundly spatial process, forging financial ecologies with consequences crucial to conditions for sustainability of social-ecological systems. The paper introduces the theme by framing financialisation in historical contexts. Financialisation of the environment is then related to processes of commodification, privatisation, neoliberalisation and accumulation by dispossession within the broader context of intersections between political economy and political ecology, highlighting the distinction between use-value/object-oriented investments and exchange-value/’investor’-oriented investments, the right to inhabit place, and the shift from control and command to economic incentives, drawing out implications for sustainability. Research on financialisation of agriculture and land resources, and on financialisation in relation to economic and social dimensions, is reviewed, and current moves towards re-regulation are considered from the perspective of a Polanyian countermovement. Conclusions reconsider the nature of the relationship between financialisation and sustainability and the challenges of bringing financial systems into the service of achieving social and natural sustainability.

Suggested Citation

  • Eric Clark & Kenneth Hermele, 2013. "Financialisation of the environment; A literature review," Working papers wpaper32, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
  • Handle: RePEc:fes:wpaper:wpaper32

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    References listed on IDEAS

    1. Iori, Giulia & De Masi, Giulia & Precup, Ovidiu Vasile & Gabbi, Giampaolo & Caldarelli, Guido, 2008. "A network analysis of the Italian overnight money market," Journal of Economic Dynamics and Control, Elsevier, vol. 32(1), pages 259-278, January.
    2. John, Kose & Mehran, Hamid & Qian, Yiming, 2010. "Outside monitoring and CEO compensation in the banking industry," Journal of Corporate Finance, Elsevier, vol. 16(4), pages 383-399, September.
    3. Fernandes, Nuno, 2008. "EC: Board compensation and firm performance: The role of "independent" board members," Journal of Multinational Financial Management, Elsevier, vol. 18(1), pages 30-44, February.
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    Cited by:

    1. repec:eee:tefoso:v:127:y:2018:i:c:p:23-37 is not listed on IDEAS
    2. Hansjorg Herr, 2016. "After the Financial Crisis; Reforms and Reform Options for Finance, Regulation and Institutional Structure," Working papers wpaper148, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    3. Herr, Hansjörg, 2016. "After the financial crisis: Reforms and reform options for finance, regulation and institutional structure," IPE Working Papers 63/2016, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

    More about this item


    financialisation; sustainability; commodification; political ecology; land;

    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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