Integrating micro-foundations of and political economy perspectives on green finance – towards a transdisciplinary understanding

Over the past two decades, the phenomenon of green finance has rapidly developed from a niche market into an expanding industry, a regulatory agenda, and a discourse reaching into every corner of the financial system from mortgage lending to monetary policy. This dynamic is not only a dynamic of growth but also of constant transformation. In parallel, green finance – which we preliminarily define as the entanglement of the financial system with environmental matters of concern – has attracted increasing academic attention across disciplines and thus grown as a research object. This latter dynamic is equally not purely a dynamic of growth but also of academic diversification and differentiation. With this development comes an unavoidable fragmentation of social science understandings of green finance, yet its relatively young and evolving nature leaves opportunity to address this early and head on. This workshop seeks to initiate an integrative move across sociologically informed disciplines within the social sciences to enhance our understanding and judgement of green finance – a phenomenon which we deem a critical component in the struggle to reconstitute economies in the context of an escalating ecological crisis.

As the most fruitful starting point for such an integrative move we see a clarification of the relationship between the micro-foundations of green financial practice on the one hand, and questions of the political economy and the systemic gestalt of green finance on the other hand.[1] This is for two reasons. First, with the division between these levels of analysis often tracing the boundaries between academic disciplines, the disconnect between the two is often structural and incentivised rather than bridged by the organisation of academia. Second, like many of our colleagues working on green finance, we are issue-driven researchers who are morally invested in the safeguarding of the basis of life on this planet. To deliver on this moral ambition, we believe that micro-sociological studies of green finance need to speak to questions operating at the scale of the problem – whether this scale is conceptualised as systemic, planetary, market-wide, or else. At the same time, examinations of the political economy of green finance require to be empirically rooted in concrete practices of green finance both for reasons of scientific robustness, and for the formulation of critique which can instruct practical interventions.

The purpose of this workshop is thus to explore and formulate answers to fundamental questions of ontology and epistemology for the empirical phenomenon of green finance: What is the micro and what is the macro manifestation of green finance? How do these two relate? How can we know them and their relationship? In answering these questions, we do not seek to reproduce decades of academic debates in philosophy and the social sciences, however. The purpose of this workshop is not to settle on conceptions of the macro per se; whether as purely analytical category vs. as empirical phenomenon in its own right (e.g. Ramström 2018); as a whole that is always smaller than its parts vs. as structure underpinning all micro-phenomena (e.g. Latour et al. 2012); or as exclusively dependent vs. as independent variable (e.g. Collins 1981). Instead, the workshop will stick closely to our shared empirical interest – the phenomenon of green finance – to identify and formulate concrete manifestations of the macro, clarify their relationships to micro-sociological phenomena, and discuss strategies to illuminate said relations.

In a mix of small group discussions, short “intervention-style” speeches, and plenary discussions, we will thus bring various understandings of green finance into conversation with one another (from management to economic sociology, economic geography, and political economy) to pursue a more robust understanding of the role of green finance in the current ecological crisis. To further this mission beyond this initial workshop, our aim will be to sketch a new transdisciplinary research agenda on green finance that centres on the illumination of micro-macro relations by identifying central research questions, promising empirical research objects, helpful conceptual toolkits, and to foreground shared reference points at these intersections.

This pursuit of bridging the micro-sociological foundations and the political economy of green finance serves not just the advancement of academic scholarship but also serves the purpose of facilitating normative evaluations of green finance. Thus, the workshop will also create a space to engage with different dimensions of normativity. How can we form a normative position on the Chimera of green finance in the context of an escalating ecological crisis? What are the facets of green finance that social science scholars can, should or must take a normative stance on? While such normative questions often motivate social science research on green finance, they are rarely made explicit and discussed in-depth. The present concurrence of the existential threats from transgressing planetary boundaries and a still malleable political-economic agenda that foregrounds governance through financial markets and thereby contributes to finance’s growing dominance in the ecological crisis makes these questions ever more pressing. This interdisciplinary – and multigenerational – workshop presents a unique environment to develop initial answers by bringing into dialogue default positions and assumptions engrained in the different disciplines represented by participants.

This workshop aims to be the starting point for a series of dialogues and the formation of a scholarly community that further enhances and extends the transdisciplinary understanding of green finance. Concrete next steps and possibilities for additional activities (e.g., workshops, conference panels, edited volumes, and special issues) will be discussed at the end of the workshop.