Stakeholder capitalism? Exploring the practices and politics of commercial responsibilisation

Presenting author: Ryan Jones (University of Sydney)

Other authors: Tom Baker  (University of Auckland), Laurence Murphy (University of Auckland)

Corporate responsibility in financial markets has slowly evolved over the last several decades. Initially focused on standards of corporate governance, the market for "responsible investment" now includes a range of products that claim to finance socially and environmentally responsible companies and projects. Prominent among them is green bonds: a loan-like product that promises to use lenders' money to finance green projects. Green bonds, it was thought, would increase the flow of capital to environmentally beneficial projects by providing cheaper debt than conventional bonds. With inconclusive evidence for this effect, we use this paper to ask why borrowers are issuing green bonds if there is no obvious financial or environmental benefit for doing so.

The paper primarily draws on interviews with green bond issuers and lead managers in Australia and New Zealand. Initial results suggest that accessing cheaper debt was not a priority for green bond issuers. A much greater value is being placed on the contributions green bond issuance makes to diversifying the investor base, aligning environmental and financial strategy, and enhancing organisational capacity to manage green assets and measure environmental impact. The paper concludes by reflecting on what this tells us about green bonds and the wider process of corporate responsibilisation in financial markets.  

Presenting author: Nicolas Lewis (University of Auckland)

In recent years, the notion of a blue economy has proliferated among governmental, environmental, economic, and scientific actors interested in the world's coasts and oceans. Underlying these interests is a shared recognition that the world's oceans are pivotal to the future of humanity but being degraded rapidly by human action, from climate change to agricultural, urban and industrial pollution. The blue economy might be interpreted as the discursive formation that has emerged around this contradiction, and a series of related propositions: the oceans constitute a meaningful economy of connections and related space of concern; they offer an as yet underexploited source of economic opportunity; exploiting this opportunity requires investment, science, new socio-ecological knowledge, and new regulation; and any development must adopt ecologically, culturally and socially sustainable technologies.

This paper begins from the assumption that transitioning form existing marine economies to a blue economy will not happen by itself - it will require practices of economisation and an agenda that takes seriously the opportunity to do economy differently. The paper maps traces of such practices and examines the blue economy agenda of New Zealand's Sustainable Seas National Science Challenge to consider the claims it makes to 'provide social and environmental benefit'.

Presenting author: Angus Dowell (University of Auckland)

Other authors: Nick Lewis (University of Auckland), Ryan Jones (University of Auckland)

Rising concern with just transitions to sustainable futures has unleashed interest in alternative ways of performing environmental economy.  In this paper, we examine the development of five initiatives in Aotearoa-New Zealand, each of which can be categorised broadly as an intervention in regenerative economy designed to enact new environment-economy relations.

The paper explores the ways in which these initiatives are being constructed and stabilised. We interpret the initiatives as experiments in economisation that involve practices of qualification and intermediation, which suspend tensions among matters of concern, pacify unruly elements, and secure possibilities to do economy differently. We argue that whether or not these initiatives bring about durable economic relations, they alter the landscape of environmental economy.

The initiatives confirm for us the importance of treating economy as in-the-making, the value of experimentation, and the need to rethink success in terms of making new configurations possible. They also encourage us to rethink the potentiality of state intervention in diverse economies. Focussing on experimentation and grounded agencies reveals not just an abstract potential for reconfiguring the social, cultural, environmental and economic into new socio-ecological topologies, but the active and on-going work of diverse agencies in place.

Presenting speaker: Julian Frundt (University of Sydney)

Green quantitative easing (Green QE) discourse focuses on optimising ecological outcomes via state-led, finance-driven incentive structures. To meaningfully understand the economic implications of Green QE, a firm understanding of the larger cluster of policy instruments collectively referred to as quantitative easing (QE) is necessary.

In the first instance, this article establishes a working understanding of QE based on its core features: large scale money creation, debt purchases, central bank control, and the “portfolio balance channel” (PBC). Here, particular attention is paid to how the PBC increases wealth inequality and bubble formation.

In the second instance a seemingly contradictory observation is made: the blanket term “QE” obfuscates how diverse the conceptualisation of QE has been over the last three decades.Once the dialectic between these two points of view has been established, it is used to analyse the overarching trajectory of Green QE discourse.

It is argued that unchecked Green QE in its currently proposed form will erode democratic norms and violate principles of reparative justice.Lastly, a counterproposal to existing conceptions of Green QE is outlined. Here, particular reference is made to the growing body of QE-critical literature—a resource which has thus far been ignored by central banks and policy makers.

Presenting author: Tom Baker (University of Auckland)

Other authors: Emily Rosenman (Penn State University, USA, Dan Cohen (Queen's University, Canada)

As US student debt rises to $1.7 trillion in 2021, the value and accessibility of higher education has increasingly come under question. Even against the political backdrop of possible student debt cancellation, the growth of Income Share Agreements (ISAs) points to the persistent allure of a financial fix. Framed as an alternative to conventional student loans, ISAs entail investors covering tuition in exchange for a share of students' incomes after graduation. As the use of ISAs balloons within vocational institutions, rather than in the upper tiers of the higher education sector, it is increasingly apparent that the promises of inclusion mask practices of financial predation, enrolling students in financial relationships that maximize profit-extraction and specifically target marginalised (and often racialised) communities. Motivated by the rapid growth of ISAs in recent years, and a relative absence of scholarly attention to them, this paper aims to illuminate the nature and broader significance of ISAs. Informed by grey literature, news articles, and academic writing on ISAs, we discuss the characteristics, histories and geographies of ISAs before examining the roles and motivations of three key actors or constituencies: students, higher education institutions and investment intermediaries.

To understand the broader significance of ISAs, we employ three lenses: geographies of education, financialisation of social reproduction, and digital capitalism. ISAs reorient who pays for education and when, what sort of education is paid for, and how private markets profit from higher education. Our discussion of ISAs connects to processes more widely at play in the higher education sector, where the combination of individuating logics and public crises have unlocked new opportunities for private profit. 

Presenting author: Tim Frewer (University of Sydney)

This paper set out to do two things. The first is to provide a brief analysis of why REDD+ projects are always going to be top-down, bureaucratic and expert-driven programmes that are focused on ways to create value from the spectacle of conservation (rather than doing the hard work of actually supporting conservation efforts). There has already been extensive literature written by geographers, anthropologists and political economists that uses empirical case studies to demonstrate the failures of REDD+ and so this paper, rather than providing another critique of REDD+, takes the position that REDD is at this point ineffective as an instrument to conserve forests or reduce greenhouse gas emissions. The second aim of this paper is to begin thinking about alternatives to REDD+. In doing this I will draw of case studies of REDD+ projects in Cambodia. The first problem of REDD+ is that it joins together two different problems which require vastly different responses - one is the problem of climate justice, the other of conservation. I argue that the former problem cannot be collapsed into conservation projects and require different politics (at different scales) and so I focus on the question of conservation in places like Cambodia. I argue that there are then two major battles that need to occur for successful conservation - one is a battle against the state where those with a stake in conservation fight for their autonomy in managing and using forests. The second is a battle against the coercive aspects of capitalism where semi-subsistence producers, others who depend on forests for their livelihood, those for whom forests are sacred and spiritual, or those who just want to conserve forests for communal usage, struggle to conserve forests from land clearing, timber felling and hunting. Drawing on the case studies I will consider points where solidarities and support may arise and feed into different projects of conservation projects that resist and open up new possibilities outside of the dominant green finance model.

Presenting author: Sandeep Kandikuppa (University of North Carolina, Chapel Hill)

Interest on loans is commonly seen as a tool for capital accumulation by the moneylender, particularly so in the Marxist scholarly traditions. But what if it is also a tool through which rural poor lay claim over a modicum of agency and dignity? Through qualitative interviews with farmers in Anantapur and Chittoor districts of Andhra Pradesh, I find that interest on loans is an instrument of negotiation for the rural poor. By timing the payment of interest, they ensure that they retain their credit worthiness, remain in the 'good books' of the borrowers, and save their face within their community. At the effective management of the interest on the multiple loans that the rural poor take out is a powerful strategy through which they navigate a highly complex debt market which plays host to lenders of different hues ranging from private, 'usurious' moneylenders, to government agencies providing loans at low interest rates.

My study shows that while interest is an instrument for capitalist accumulation, it has also provided the rural poor with the means to navigate capitalism. And in this process, the rural poor are not always passive victims; they are thinking beings who are constantly evaluating their options and incentives, and are constantly working out how to use interest-payment to retain their agency.  

Presenting author: Gareth Bryant (University of Sydney)

Other author: Sophie Webber (University of Sydney)

Climate change is increasingly viewed in financial terms. Specifically, climate change is viewed as a problem of bridging various financing 'gaps' between public and private sources, between developed and developing countries, and between mitigation and adaptation activities. These familiar categorisations have their uses but tend to frame climate finance as a neutral and technical tool for meeting shared goals of action on climate change. We present an alternative political economy perspective that is instead focused on how the ideas, instruments and institutions of climate finance are reshaping the relationship between capitalist economies and climate change. We argue that climate finance is a window into the different possible pathways for capitalism in the climate crisis, as both an indicator and mediator of the political economy of climate change. We outline six vantage points on climate finance from which climate futures can view viewed, contested, and configured: climate capital, climate risk, regulatory markets, speculative markets, big green states and climate justice. We illustrate the argument with examples from renewable energy financing.

Presenting author: John Morris (University of Warwick)

This paper provides a critical analysis of the way that leading figures in the central banking and financial regulatory community currently frame the financial stability implications of climate change related financial risks using terms relating to heterodox economic conceptions of radical uncertainty such as 'Green Swan' events and 'Climate Minsky' moments. The framing of such climate related risks contributes to geographical processes of risk management and the way that the shadow banking system is used as a 'spatial fix' for climate related financial risk. In this paper I employ Niklas Luhmann's theorization of risk as an organizing concept for societal decision-making in the face of systemic complexity. By attending to the ways in which events are framed and accordingly managed, this approach argues that the labelling of events as 'risks' implicitly entails liability and responsibility for events and their management, whereas 'dangers' or uncertainty denotes absolution or refusal of liability for catastrophes and losses. Using this conceptualization and attention to the politics of ascriptions of danger/uncertainty. I argue that regulatory formulations hollow out elements of heterodox conceptions of uncertainty- such as the Black Swan, Knightian Uncertainty and the Post-Keynesianism of Minsky's Financial Instability Hypothesis- in ways that render climate triggered financial events both actionable through market mechanisms and governable by market actors. Finally, by drawing on documentary and interview research into regulatory stress testing and expected shortfall modelling, this paper argues that such market techniques do not capture the long tail risks of climate related catastrophe. The outcome, I suggest, is likely to prompt an acceleration of the dispersal of climate related risk into the shadow banking system. This purported 'spatial fix' may well threaten the stability of the regulated banking system.