From financial measures to transformative finance

The Glasgow Climate Pact urged all countries to commit to limiting the rise in the global average temperature to 1.5°C and to phase out unabated coal power and inefficient subsidies for fossil fuels. It fueled arguments about climate-related transition risks, represented as stranded fossil fuel assets, stimulating supply-side climate policy measures, fossil fuel divestment, green finance, and environmental, social, and governance investments. This chapter reviews scholarly arguments for these financial measures and the responses of banks and financial investors, with a special focus on China, which implemented green and restrictive credit access to heavily polluting industries as an environmental and energy policy measure. Two research gaps are identified that are worthy of scholarly investigation: the relevance and context-contingency of finance as a supply-side climate policy measure and spatial spillover effects on carbon emissions. This chapter concludes by raising three research questions, which will be addressed in each part, and by presenting the book’s structure and a summary of each chapter.