Green financing, interrupted. Potential directions for sustainable finance in Luxembourg

This paper has a quintessentially explorative character. It aims at
identifying existing as well as potential (yet missing) links between the
finance industry and local businesses that aspire to more sustainable
economic practices. Building on the observation that green investments
have been gaining weight in global investors’ strategies, we analyse
how sustainable – in the most comprehensive sense of the word –
green investments could ultimately be(come), when green assets are still
managed according to the logic of “financialised finance”. This latter’s
technologies of commodification, securitisation and derivatives-trading
allegedly oppose alternative economic practices that pursue economic
sustainability through social and environmental gains. In contrast, we
investigate how the finance industry relates to alternative financial
practices, products and organisations that offer sustainability-oriented
financing services, – for example, regional banks, cooperatives and the
like, – with a specific focus on green, social and solidarity businesses.
Both approaches subscribe to apparently contradictory ideologies. We
establish a beneficial dialogue between the opposing models of “green
capitalism” and “alternative economies” so as to identify potential points
of intersection. The context of Luxembourg’s local/regional economies
provides a great opportunity to empirically access three levels of
investigation: the private sector, the public sector and an international
financial centre, a key facilitator for green finance, thus utilising insights
from the concept of bricolage. Whilst supporters of Luxembourg’s
emerging green finance profile recognise its positive impact on the
small country’s national branding, in combination with economic stimuli,
more critical commentators point to pure “green washing” effects.