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

Celine Louche, Timo Busch, Patricia Crifo, Alfred Marcus

Research output: Contribution to journalArticle

6 Scopus citations


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.

Original languageEnglish (US)
Pages (from-to)3-17
Number of pages15
JournalOrganization and Environment
Issue number1
StatePublished - Mar 1 2019



  • climate change
  • financial markets
  • low-carbon economy
  • theory of change

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