Simon Schairer

The paper is part of a special issue on sustainable finance entitled "Puzzling, powering, profiting: The politics of sustainable finance in Europe". We are grateful for the kind guidance and support from the guest editors @danmertens.bsky.social and @nataschavanderzwan.bsky.social!

📌 Examining these articulation strategies helps reveal the political dimension of the relationship between financial capital and sustainability, highlighting efforts to engage various stakeholders, privileging some and sidelining others.

📌 By proposing the political strategy of ‘playing the capital market’, the paper emphasizes the strategic malleability of market-related ideas by EU institutions, but also the necessity to relegitimise them in the name of a common good.

📌 In addition, they attempted to reconcile the tension between the goal of redirecting financial flows to meet environmental targets and the need to enhance the competitiveness of the European financial and industrial system.

📌 By introducing sustainable finance into the EU agenda 'as part of' the CMU project in 2016, their strategy sought to ease the tension between the short-termism and volatility of market-based finance, in order to mobilize for investment purposes, and the long-term nature of green investments.

📌 The paper explores how the European Commission and the ECB have simultaneously sought to relegitimise the Capital Markets Union (CMU) and mobilise market-based finance for green investments.

Playing the capital market? Sustainable finance and the discursive construction of the Capital Markets Union as a common good The Capital Markets Union (CMU) project aims to create more integrated capital markets in Europe. However, the project faces resistance, and despite ongoing efforts EU capital markets remain fragme...

Happy to share our new open-access article from the SuFi project at Witten/Herdecke University, just published in the @jeppjournal.bsky.social!

www.tandfonline.com/doi/full/10....

Our #policy #paper has just been published: "Financing the #green #transition: Increasing #bankability, phasing out carbon investments and funding 'never bankable' activities". We ask: Why does a large green financing gap persist? What policies do we need to change it: www.uni-wh.de/en/your-camp...

🚨 Do check out this very timely Policy Report on "Financing the green transition" 👇

Figure from our #policy #report: 1. The main barrier to #financing the necessary activities for the sustainable transition is their lack of #bankability
2. High GHG-emitting activities remain #bankable and thus continue to attract financing from banks and shadow banks
www.uni-wh.de/en/your-camp...

How can political decision-makers strengthen sustainable and climate-friendly investments - and at the same time effectively prevent climate-damaging financial flows? The latest [tra:ce] Policy Report takes a closer look at this question.

Further information:
www.uni-wh.de/en/your-camp...

We are thrilled to announce the public launch of our policy paper: "Financing the green transition: Increasing bankability, phasing out carbon investments and funding 'never bankable' activities" Monday 30.06.2025, 11:00 (CET) via Zoom.

Please register here:
www.uni-wh.de/die-finanzie...

Ratschläge aus der Zukunft gesucht!

Wir suchen inspirierende, innovative & kreative Antworten auf die Frage „Was rät die Zukunft dem Heute?”

Stell dir vor: Es ist das Jahr 2070 und du lebst in einer nachhaltigen und gerechten Welt.

Spread the word! :)

www.uni-wh.de/euer-campus/...

Check out our second [tra:ce] working paper!
This time, we zoom in on the role of banks in sustainable finance: "The green banking gap: how bankability, business models, and regulations challenge banks' decarbonisation". *Join our public paper launch on Monday, 26 May, 11h (CET)*!

Interesting read.

📢 Job announcement – 1 PhD researcher in my "Global Sustainability Governance" research group

Please share this opportunity within your networks and encourage suitable candidates to apply (or consider applying yourself)! Happy to answer questions!

Deadline: 4 June 👇
www.uni-due.de/karriere/ste...

Online discussion event of our new working paper - spread the word!!!

www.uni-wh.de/en/launch-of...

Thanks a lot for the valuable feedback, @sebastianmack.bsky.social ! :)

+ also @jryancollins.bsky.social and @jvtk.bsky.social

Thanks a lot for the colab, @riccardobaioni.bsky.social !

Relevant for @danielagabor.bsky.social gabor.bsky.social @adamtooze.bsky.social oze.bsky.social @bencaldecott.bsky.social ott.bsky.social @emacampiglio.bsky.social ky.social @steffenmurau.bsky.social @vgalaz.bsky.social @taxjustice.net e.net @sebastianmack.bsky.social

We argue that shadow carbon financing may increase climate-related systemic risks in various ways (see Figures). Consequently, financial regulation must address shadow carbon financing to avoid a "climate Minsky moment"

All forms of shadow carbon financing have in common that they enable the continuance of carbon financing ‘by other means’, respectively the circumvention of regulatory attempts to steer financial flows away from carbon-intensive activities.

We define "shadow carbon financing" as the obfuscation and/or redirection of carbon financing flows via alternative financial actors, entities, and instruments that are part of the offshore-shadow-banking nexus.

(1) loan securitization, (2) emissions risk transfers, (3) bond financing, (4) carbon asset partitioning, (5) offshore corporate wealth chains, (6) private credit, and (7) proved developed producing reserves securitization.

Drawing on qualitative expert interviews and financial market data, the paper explains how the offshore-shadow-banking nexus hampers the green transition by introducing the concept of ‘shadow carbon financing’, which can operate through the following seven channels:

These blind spots seriously undermine regulatory efficacy because offshore finance enables the obfuscation of financial flows, while shadow banking facilitates alternative financing to high carbon-emitting firms.

Recent years saw regulatory efforts to steer the financial system towards financing the transition to a net-zero economy and phase out carbon financing. However, EU regulation has left the nexus of offshore finance and the shadow banking system untouched.

By @simonschairer.bsky.social er.bsky.social - @janfichtner.bsky.social .social - @riccardobaioni.bsky.social rdobaioni.bsky.social - David Castro - @joaocoxinha.bsky.social bsky.social - Janina Urban - @paulahaufe.bsky.social - @jwullweber.bsky.social eber.bsky.social

🚨 New Working Paper published:

Out of the light, into the dark: how ‘shadow carbon financing’ hampers the green transition and increases climate-related systemic risk

🛢️💸🏝️

papers.ssrn.com/sol3/papers....

A 🧵 with our main arguments: