Abstract
This chapter explores the intricate dynamics of stakeholder interactions within Europe's sustainable finance ecosystem, employing Stakeholder Salience Model (SSM) as a framework to assess the roles, power, legitimacy, and urgency of key actors. By critically examining institutional reports from prominent organisations, including the European Commission, European Investment Bank (EIB), and IOSCO, the chapter provides a comprehensive analysis of how these stakeholders influence the adoption and implementation of sustainable finance policies. Further, it identifies the underlying tensions, opportunities, and challenges that impact the realisation of sustainable finance objectives, including regulatory fragmentation, the prevalence of greenwashing, and the varying approaches of financial institutions towards Environmental, Social, and Governance (ESG) integration.
The findings highlight that, despite significant efforts to align financial markets with sustainability goals, divergent stakeholder priorities and power imbalances create obstacles to achieving long-term, systemic change. Also, the findings reveal significant challenges, including regulatory fragmentation, greenwashing, and the diverging approaches of financial institutions. Thus, in alignment with the book’s theme (sustainable finance for society), this chapter underscores the necessity of cohesive regulatory frameworks and cross-stakeholder collaboration to overcome these barriers. It emphasises that sustainable finance serves as a catalyst for addressing pressing societal issues, including climate change, social equity, and ethical governance, through a more inclusive and transparent financial ecosystem. The chapter concludes by recommending further exploration of emerging trends, such as digital transformation in sustainable finance, grassroots movements’ influence, and the integration of non-financial indicators into investment decisions, which are vital for embedding societal benefits into financial practices.
The findings highlight that, despite significant efforts to align financial markets with sustainability goals, divergent stakeholder priorities and power imbalances create obstacles to achieving long-term, systemic change. Also, the findings reveal significant challenges, including regulatory fragmentation, greenwashing, and the diverging approaches of financial institutions. Thus, in alignment with the book’s theme (sustainable finance for society), this chapter underscores the necessity of cohesive regulatory frameworks and cross-stakeholder collaboration to overcome these barriers. It emphasises that sustainable finance serves as a catalyst for addressing pressing societal issues, including climate change, social equity, and ethical governance, through a more inclusive and transparent financial ecosystem. The chapter concludes by recommending further exploration of emerging trends, such as digital transformation in sustainable finance, grassroots movements’ influence, and the integration of non-financial indicators into investment decisions, which are vital for embedding societal benefits into financial practices.
| Original language | English |
|---|---|
| Title of host publication | How to manage finance for society |
| Subtitle of host publication | meeting grand challenges of the new millennium |
| Place of Publication | London |
| Publisher | Routledge |
| Publication status | Accepted/In press - 26 Feb 2025 |