Public-Private Interactions in the Governance of Sustainable Finance

• In Event: International Political Economy Virtual Poster Session

Abstract

Improving the sustainability of the financial sector has gathered increased attention in recent years. Several governments and international organizations have established initiatives that intend to create rules and policies on sustainable or green finance. Examples include the EU’s High-Level Expert Group on Sustainable Finance, the UK’s Green Finance Taskforce, Canada’s Expert Panel on Sustainable Finance, and the G20’s Sustainable Finance Study Group. Public initiatives add to an increasingly crowded space; private actors have long been active in this area, developing rules around Environmental, Social and Governance (ESG) Indicators, climate impact disclosure, and financial instruments such as green bonds. Recent advances in the literature dealing with the interactions between transnational private and public governance have begun to unpack the role private governance plays in a regime complex in a given issue area (Keohane and Victor, 2011; Abbott et al., 2015; Green and Auld, 2017; Cashore et al., 2020, Renckens, 2020). However, where studies typically focus on a handful of demonstrative cases, few efforts have systemically documented and analyzed the totality of governance initiatives that make up a regime complex, and the domain of sustainable finance remains largely unexplored. Using an original dataset of 90 public, hybrid, and private sustainable finance governance initiatives, we assess the specific types and forms of private governance in relation to the larger regime complex, testing hypotheses from the global governance and international political economy literature about the expected structure of the regime complex (e.g., the centrality of public v. private organizations; cf. Zelli et al. 2017; Abbott et al. 2016), the types and origins of authority (e.g., delegated v. entrepreneurial private authority; cf. Green 2014), and the functions of private governance therein (e.g., rule-setting, capacity building, or information provision; cf. Andonova et al. 2009; Hoffmann 2011). The broader questions the paper aims to address with this analysis are: (1) To what extent are these diverse governance initiatives complementary or competitive in nature? (2) What does this teach us in terms of their potential to contribute to the global governance of sustainable finance?

Authors

• Stefan Renckens, University of Toronto

• Christian Elliott, University of Toronto