Treating ecological deficit with debt: The practical and political concerns with green bonds

Jones, Ryan; Baker, Tom; Huet, Katherine; Murphy, Laurence; Lewis, Nick

doi:10.1016/j.geoforum.2020.05.014

Cited by 80 publications

(43 citation statements)

References 29 publications

(66 reference statements)

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“…Las evaluaciones críticas sobre los bonos verdes son todavía escasas y se centran en cuestiones como: las implicaciones éticas ante la emergencia climática (Paranque y Revelli, 2019); su relación con otros objetivos, como los Objetivos de Desarrollo Sostenible (Siswantoro, 2018;Tolliver et al, 2019), sus implicaciones prácticas y políticas, incluidos los riesgos de promover el greenwashing (Jones et al, 2020); y el reforzamiento de las desigualdades (Bigger y Millington, 2020). Son escasas también las referencias a los bonos verdes en la literatura más amplia sobre finanzas verdes (Antal y Van der Bergh, 2016;Zhang et al, 2019;Reyes, 2020), y en la literatura más crítica sobre los procesos de financiarización de la naturaleza (Jessop, 2012;Aglietta et al, 2015;Bracking, 2019).…”

Section: Ntroducciónunclassified

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Title: Green bonds in the world-ecology: capital, nature and power in the financialized expansion of the forestry industry in Brazil

et al. 2021

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The 2008 financial crisis opened the doors of green capitalism as a financially sound approach to saving the planet from the worst effects of the climate emergency. The emphasis on the role of finance in promoting “green growth” has permeated mainstream political, academic and business approaches to climate change adaptation and mitigation, assuming multiple forms - from the carbon markets of the Kyoto Protocol and the Paris Agreement, to the Environmental, Social and Governance taxonomy for “green” investments, to the proliferation of sustainable labels in several economic sectors. The present article offers a critical appraisal of one of the most prominent arguments that upholds the idea that it is possible and desirable to achieve sustainability and economic growth through finance: green bonds. Green bonds are debt instruments whose proceeds are earmarked to fund projects with supposedly environmental benefits. After some years in the background, they now occupy a central position in the green recovery narrative and political framework all over the world. Most of the academic literature tends to naturalize green bonds as an eminently technical solution to reconcile economic growth and environmental sustainability. Filling an epistemological gap, the present article leverages a world-ecology approach to embed the financial phenomenon of green bonds within the broader picture of the capitalist political economy and the expansion of its ecological frontier. In light of the ongoing experiences that the authors have been following in the Brazilian legal, financial and political context, the article unpacks and makes sense of green bonds as a tool in the hands of climate finance that reproduces global patterns of North-South uneven development and the shifting of ecological costs. To test the potential of the “interpretative framework” offered by a world-ecology approach, we mobilize it in the concrete case of green bonds issuances directed to fund the forestry sector in Brazil. Aware that the current phenomenon only represents a blip in comparison to the largeer temporal (the longue dureé) and spatial (the world system) scales usually deployed by world-ecology, we nonetheless discuss how the ideological, technical and power dynamics behind the issuance of green bonds unleash capital accumulation, produce a financialized and subordinated construction of nature, and entail an institutional arrangement. The article is organized around 3 main sections. After the introduction, section 1 describes green bonds as one of the most fashionable financial topics of the moment, and one that promotes a shift in discourses towards the need of actively building a “green economy”. Although from a legal standpoint green bonds embody no significant difference from regular bonds, our focus is to describe the promises around them, the current (private) governance structure, and the trends in the issuance of these debt instruments both in the Global North and South, with a specific focus on the case of Brazil. In section 2, we look at the operations of green bonds emissions on the ground, i.e. taking as an example the context of green debt underpinning the Brazilian forestry sector. The analysis reveals how the emissions, made predominantly by large multinational companies actively present on the global market, feed off great efforts deployed by both the public and the private sector in constructing an image of the sector as a key player in the emergent “bioeconomy” and in the strengthening of Brazil’s goals in the Paris Agreement. However, we describe how green bond revenues that are officially committed to the implementation of “sustainable management of forests” are associated with the expansion of the ecological frontier in the Brazilian territory, stretching the boundaries of the area dedicated to tree plantations and amplifying social and environmental tensions. The backstage of the emissions shows how capital accumulation through green bonds is associated with the co-production of nature for the purpose of accumulation, generating concerns that are often diluted or transformed into procedural requirements. Debt generated by the subscription of green bonds, we argue, is not only financial, but also social and ecological. In section 3, we put forward that for private accumulation to be successful, green bonds in the forestry sector demand an institutional arrangement that combines state support and private governance of debt in its financial, social and ecological dimensions. Rather than being the result of an idealized and spontaneous market, a set of institutional transformations have to be considered in order to comprehend the feasibility of green bonds in the Brazilian forestry sector. We thus describe the historic connection between forestry and the state, the endless public incentives to put nature to work, the functional adaptations of the Brazilian environmental legislation and the regulation concerning the demarcation, access and use of land. In this context, we argue that green bonds add yet a new institutional layer to the process of creating and validating specific forms of nature, through a governance structure that dilutes the tensions between the promise of environmental benefits and its concrete negative social and environmental impacts. We conclude the article by reassembling these findings as part of the capitalist world ecology “dialectical unity” of capital accumulation, co-production of nature and power. We suggest that the world-ecology approach allows us to grasp green bonds as a complex form that has so far been ignored in the relevant literature. As any other phenomenon of financialization, a green bond should not be understood in isolation from its material basis, since it is from that basis – and its social and environmental conditions and contradictions – that it appropriates value. As the example of the Brazilian forestry sector illuminates, the “greenness” of the financial debt inscribed in green bonds may come into existence at the expense of the social and environmental debt that underlie the forestry sector productive model. Hence, although the explicit inclusion of “environmental concerns” into financial considerations and project implementation has been praised as a step towards the recognition that finance has a material impact on the planet and that these externalities shall be accounted for, the article warns of the typical green arithmetic move put forward by green bonds. Green bonds inevitably co-produce nature and social relations, but in a very unequal way that emphasizes capital accumulation and that does not necessarily protect the environment (even when standards are introduced). Much to the contrary, green bonds may come into being at the expense of other ways of living ecologically, and by restoring injustices of the past and creating a regenerative future - in other words, by creating debt.

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Section: Ntroducciónunclassified

“…Definición adoptada por profesionales y personas académicas que trabajan el tema. Para ver otra, consulteJones et al (2020).…”

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Title: Green bonds in the world-ecology: capital, nature and power in the financialized expansion of the forestry industry in Brazil

et al. 2021

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“…Traditional sources of funding such as grants, forgivable loans, and other mechanisms have remained a part of aid and finance packages from donor countries and philanthropic organizations, but in recent years, the growth of green bonds has emerged as the most important form of climate finance in terms of overall share of capital investment in climate-focused projects (Jones, Baker, Huet, Murphy, & Lewis, 2020). Relatively insignificant prior to 2010, green bond issuance rose to $323 billion by the end of 2019, eclipsing earlier projections (Kuchtyak & Davison, 2020).…”

Section: Framing and Monetizing Crisis: Urgent Urban And Investablementioning

confidence: 99%

“…As scholars have noted, however, the rapid growth and popularization of green bonds is not without its faults (Bigger & Millington, 2020;Clark, Reed, & Sunderland, 2018;Jones et al, 2020). Indeed, the transformation of climate finance has introduced numerous concerns about ambiguity in climate finance regulation (Hall, 2017), the de-politicizing effects of a mainstreamed message of adaptation (Scoville-Simonds, Jamali, & Hufty, 2020), the denial or lack of evaluation of social dimensions of projects (García-Lamarca & Ullström, 2020), and the likelihood of reviving a new iteration of structural adjustment policy reminiscent of the Washington Consensus (Bigger & Webber, 2020).…”

Section: Framing and Monetizing Crisis: Urgent Urban And Investablementioning

confidence: 99%

“…Third, while engaging private capital is an important component of climate funding, hopes that the private sector will emerge as the responsible leader in just, equitable, and sustainable development are misplaced. As the private sector's role in climate finance has increased, so has critical scholarship that expresses concern about equity issues associated with a for-profit model, their increasing influence in development agendas, their lack of meaningful engagement with target communities, their tepid progress on adaption projects, the lack of credible oversight and regulation, and their overdependence on credit ratings, risk assurances, and market stability (Bigger & Millington, 2020;Bigger & Webber, 2020;Clark et al, 2018;Graham, 2017;Hall, 2017;Jones et al, 2020;Kuyper et al, 2018;Pauw, 2015;Walenta, 2018). Furthermore, it is becoming clear that the emergence of green and sustainable bond markets as funding mechanisms-orchestrated by institutions like the World Bank-embody what Bigger and Webber (2020) refer to as 'Green Structural Adjustment.'…”

Section: Conclusion: Profit Power and The Coloniality Of The Climate Crisismentioning

confidence: 99%

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Crisis Capitalism and Climate Finance: The Framing, Monetizing, and Orchestration of Resilience-Amidst-Crisis

Long

2021

PaG

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Throughout the development sector there has been a pronounced call for new funding mechanisms to address the climate crisis, and much of this is focused on attracting private sources of capital to fund ‘bankable’ projects in climate-vulnerable cities throughout the world. Enacted amidst a 21st century landscape of interlocking financial, epidemiological, and ecological crises, this call features an urgent narrative of ‘resilience-amidst-crisis’ that promotes large-scale, profitable investments as a form of green growth through debt-financing. The political orchestration and administration of new funding mechanisms (particularly green bonds and sustainable bonds) requires a new form of climate governance focused on the channeling of enormous sums of private capital through an assemblage of intermediaries toward profitable climate projects. This article interrogates this trend in climate finance, revealing that the framing, monetization, and orchestration of climate projects is dependent on a narrative of crisis capitalism deeply rooted in a colonial mindset of exploitation and profit. A key aim of this article is to deconstruct the contemporary dominance of crisis-oriented development and suggest the goal of decolonizing and democratizing the climate finance system.

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Corporate integrity culture on environmental, social, and governance (ESG) performance

Bao,

Sun,

Han

et al. 2023

Corp Soc Responsibility Env

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Recent research has viewed desirable environmental performance as the proxy of corporate integrity culture. Based on the stakeholder theory, we extend this literature by examining whether the corporate integrity culture is associated with environmental, social, and governance (ESG) performance among China A‐listed firms. We first build the integrity culture dictionary by the word embedding model. We also absorb the social influence into the integrity dictionary and identify corporate integrity culture through textual analysis. The results show that corporate integrity culture is positively associated with ESG performance. This research further discloses that this relationship is from both an indirect of integrity on green innovation and a direct effect of integrity in signaling internal stakeholders' behavioral integrity and verifying integrity culture to external stakeholders. Overall, the empirical evidence further enriches our understanding of the relationship between ESG performance and corporate integrity culture in China.

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Treating ecological deficit with debt: The practical and political concerns with green bonds

Cited by 80 publications

References 29 publications

Title: Green bonds in the world-ecology: capital, nature and power in the financialized expansion of the forestry industry in Brazil

Title: Green bonds in the world-ecology: capital, nature and power in the financialized expansion of the forestry industry in Brazil

Crisis Capitalism and Climate Finance: The Framing, Monetizing, and Orchestration of Resilience-Amidst-Crisis

Corporate integrity culture on environmental, social, and governance (ESG) performance

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