Abstract
Sustainable finance is a vast and growing industry that promises to address global environmental and social challenges through selective investment. Over the past sixty years, it has evolved through various forms—responsible investing (RI), corporate social responsibility (CSR), and environmental-social-governance (ESG) investing—with a consistent message: that investors can leverage financial power to influence corporate behavior in ways that mitigate pressing global problems such as climate change, biodiversity loss, and economic inequality. Sustainable finance has attracted trillions of dollars in investment and become a major area of professional specialization in the financial services industry.
Responses to sustainable finance vary widely by country and politics, from enthusiastic support in much of the European Union to fierce opposition in Republican circles in the U.S. Yet, perhaps unintuitively, the cutting edge of innovation in the field has emerged in Norway. Despite an economy deeply tied to oil production, Norway is home to some of the world’s boldest sustainable finance institutions. Fjord Future Asset Management (pseudonym) (FFAM) stands out as a pioneer, having established Norway’s first sustainable finance team in the 1990s. This dissertation is based on two years of immersive fieldwork in Norway, including twelve months at Fjord Future Asset Management, where as part of my fieldwork, I worked as a sustainability communications advisor and engaged daily with portfolio managers, sustainability analysts, sales teams, and senior executives.
Professionals at Fjord Future research and analyze sectors and companies on select sustainability criteria and take investment decisions accordingly, balancing client gains and the institution’s sustainability goals. They screen the thousands of companies in Fjord Future’s investment portfolios for breaches in environmental sustainability and social principles, and when breaches occur, they embark on courses of action, ranging from communicating directly with the company to seek remediation, to filing shareholder resolutions, to divesting Fjord Future’s holdings. They also collaborate with civil society organizations and policymakers, engage with governments to promote sustainability-aligned policies, and produce public-facing content to communicate Fjord Future’s institutional stance and shape public opinion.
Yet, in carrying out these responsibilities, the professionals on the sustainable finance team encounter what I call “impossibilities”: severe limitations of source data, unresolvable dilemmas, and the gap between compliance and impact.
Limitations of source data: Sustainable finance professionals, in their research on portfolio companies, rely almost solely on these companies’ mostly unaudited internal corporate disclosures. This limitation of source data extends to their use of third-party sustainable finance screening tools, which are similarly based on unaudited disclosures and other publicly available information. To directly measure the real-world social and environmental impact of thousands of portfolio companies would, of course, be an impractically vast, complex, and expensive undertaking. And even were it possible, the need to compare companies (to curate an investment portfolio) requires quantifiable metrics: numerical values must be assigned to goods (like social equality or deep-sea biodiversity) that stakeholders value qualitatively and absolutely, creating dissonance between sustainable finance practice and the very communities it aims to serve.
Unresolvable dilemmas: Sustainable finance professionals face investment dilemmas with no clear ethical resolution, involving decisions between incommensurable goals—such as whether or not to support Tesla despite labor concerns, or deep-sea mining for metals deemed critical to the green transition. Further complicating the resolution of these dilemmas is sustainable finance’s obligation to ensure the largest possible returns to clients, by maintaining profitability while cutting the costs associated with screening and sanctioning for sustainability.
Gap between compliance and impact: Sustainable finance is premised on the idea that it creates positive, real-world impact. Yet, because such impact is difficult to generate and measure, professionals at Fjord Future rely on a risk-exposure discourse, using available tools and data to demonstrate that their portfolios avoid companies with sustainability risks. This satisfies client expectations and complies with institutional policies, while implying eventual on-the-ground impact, since, in principle, withdrawing investment from high-risk firms should incentivize better practices. In this indirect way, Fjord Future maintains a narrative of incremental, eventual change while adhering to shareholder primacy.
Each of these “impossibilities” points to a deeper limitation of sustainable finance: despite bold ambitions, it remains shaped by the structural imperatives of finance itself, which prioritizes profit for a limited set of investors while outsourcing collective concerns to individuals, civil society, or governments. In this context, harnessing financial power to address environmental and social challenges becomes difficult. While sustainable finance represents a meaningful effort to improve collective well-being, its reliance on highly mediated market investment practices further weakens the already tenuous link between portfolio curation and real-world change.
My research builds on foundational anthropological work that has made finance’s structures and tools more transparent, while also critiquing the damage it causes through wealth concentration and disregard for planetary and societal considerations. I extend this critique by examining the structural constraints that limit sustainable finance, even when it seeks to promote collective good. Ultimately, even institutions such as Fjord Future—which has some of the strongest commitments among its peers—remain constrained in their ability to achieve environmental and social goals. This limited effectiveness prompts a pressing question: how can finance be transformed, in both principle and practice, to better serve collective well-being?
