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In person icon Shaping the Green Transformation: The Role of Private Actors in Environmental Politics

Environmental Policy
European Politics
Green Politics
Interest Groups
Political Economy
Regulation
Business
Climate Change
P433
Friedrich Haas
University of Cologne
Michael Kemmerling
University of Cologne
Hanna Doose
Max Planck Institute for the Study of Societies – MPIfG

In person icon Building: New Philosophy Building, Floor: 1, Room: 112

Friday 13:30 - 15:15 EEST (29/08/2025)

Abstract

This panel highlights the crucial role of the private sector in shaping the trajectory of the green transition, moving beyond a state-centric view of climate action. While policymakers develop frameworks to facilitate the green transformation, these frameworks are restricted and shaped by the economic positions and political preferences of private actors. Thus, the transition to a sustainable and carbon-neutral economy requires the active participation of actors such as companies, banks, investors, and other stakeholders. In addition to a shared adoption of an actor-based analytical framework, contributions to the panel emphasize how green politics is shaped by the economic structure in which private actors are embedded. At the core of the panel lies a critical question: how does the interaction between the economic position and the political preferences of private actors influence (supra)national trajectories towards a green economy? While all contributions to this panel tackle this overarching question, they focus on different actors – e.g. banks, manufacturing firms, energy companies, service companies, investors, auditors – and put different weight on the economic and political dimension of decarbonization. Case studies of the Austrian and Danish export-oriented manufacturing sector show how the demand for green products and services cascades through global supply chains, impacting firms' decarbonization strategies. This drives the unparalleled emergence of a green export-led growth model in Denmark and triggers the surprising green transition of the Austrian growth model. Focusing on the financial sector but also highlighting the importance of banks’ structural position in the economy as well as their organizational culture, a qualitative comparative analysis of European banks uncovers substantial variation in their decarbonization efforts. Contributions to the panel show further how the embeddedness of private actors into national economic systems as well as differences in their business model shape how firms, financial institutions, and investors shape and respond to policies promoting sustainable finance and the green transformation. In addition to their direct economic impact, the political preferences of these actors toward sustainability regulations also do enable or constrain ambitious policies regarding the environmental crises. Focusing on the policy area of corporate sustainability reporting in the EU, an innovative mixed-methods study uncovers that structural cleavages between competing business interests can be broken-up when policies are incrementally expanded. Policy feedback can, thus, create and expand green lobbying coalitions among private actors. Moreover, an analysis of the implementation of the EU Sustainable Finance Action Plan demonstrates how diverse sustainability classification strategies of investment funds emerge from the efforts of private actors — both within and beyond the regulatory scope — to perform sustainability in ways that ensure compliance while preserving adequate risk diversification. But risk is also transferred to other actors through energy transition policy. A study of energy companies’ preferences shows that financialization of energy has distributional consequences. Overall, the panel contributes to the literature on environmental politics, green capitalism and sustainable transformation by offering actor-based explanations for different economic trajectories of decarbonization and associated policy dynamics. The panel offers interdisciplinary approaches from economic sociology and political economy while providing a nuanced understanding of how firms are actively shaping the green transition in response to market demands, their supply-chain position, competitive pressures, and green policies. It emphasizes the importance of private actor preferences in shaping policy outcomes and highlights the conditions under which businesses drive and support, rather than delay and oppose, the green transition. Through detailed qualitative (case) studies, the panel sheds light on the interplay between policy design, business strategies, and societal pressures and addresses the interlinkages of environmental, economic, and social challenges, offering important lessons for the governance of the green transformation in Europe and beyond.

Title Details
Policy Feedback Mechanisms in Environmental Politics: The Case of Corporate Sustainability Reporting in the European Union View Paper Details
Green Vanguards and Dependent Followers: Green Growth and Decarbonisation in Small Export-Led Economies View Paper Details
Institutionalization of Sustainability in the European Investment Funds Market View Paper Details
The Implications of Financialization for Energy Companies‘ Interests and Preferences in Energy Transition Policies View Paper Details