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Financial Markets and the Transition to a Low-Carbon Economy: Challenging the Dominant Logics

Author

Listed:
  • Céline Louche

    () (Audencia Business School)

  • Timo Busch

    (University of Hamburg)

  • Patricia Crifo

    (UPN - Université Paris Nanterre)

  • Alfred Marcus

    (University of Minnesota [Twin Cities] - University of Minnesota System)

Abstract

Financial markets play a major role in contributing to the transition to a low-carbon economy. Although many initiatives and developments are taking place, this is just the beginning. In this article, we argue for a theory of change—a theory rooted in logics that will help financial markets play a key role in the transition to a low-carbon economy. We argue that the current dominant logics in finance—short-termism, predictability of the future based on ex-post data, price efficiency, and risk-adjusted returns—impede the effective integration of climate considerations in financial markets. We suggest four alternative logics that can enable and foster a change toward the low-carbon economy: long-termism, systems interconnectedness, carbon price dynamics, and active ownership.

Suggested Citation

  • Céline Louche & Timo Busch & Patricia Crifo & Alfred Marcus, 2019. "Financial Markets and the Transition to a Low-Carbon Economy: Challenging the Dominant Logics," Post-Print hal-02016756, HAL.
  • Handle: RePEc:hal:journl:hal-02016756
    DOI: 10.1177/1086026619831516
    Note: View the original document on HAL open archive server: https://hal-audencia.archives-ouvertes.fr/hal-02016756
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    Cited by:

    1. Salome Zimmermann, 2019. "Same Same but Different: How and Why Banks Approach Sustainability," Sustainability, MDPI, Open Access Journal, vol. 11(8), pages 1-20, April.

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