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Journal Articles Organization & Environment Year : 2019

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

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Céline Louche
Timo Busch
  • Function : Author
Patricia Crifo

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.

Dates and versions

hal-02016756 , version 1 (12-02-2019)

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Cite

Céline Louche, Timo Busch, Patricia Crifo, Alfred Marcus. Financial Markets and the Transition to a Low-Carbon Economy: Challenging the Dominant Logics. Organization & Environment, 2019, 32 (1), pp.3-17. ⟨10.1177/1086026619831516⟩. ⟨hal-02016756⟩
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