Living Up to Net-Zero Commitments: A Comparison of European Banks’ Efforts to Decarbonize

Francesca Romana Paradiso

Europe is pledging to become the first climate-neutral continent, assigning to the private sector the catalytic role of channeling resources in sustainable sectors. Surprisingly, economic sociologists and political economists have not yet addressed the pressing question of what role banks play in this intended decarbonization process. The question is particularly relevant as banks are still key actors in Europe’s financial system and it is important to understand conflicts and possible reconciliations between climate considerations and their financial profit motives. However, European banks differ in decarbonization opportunities and constraints due to their different structural positions in the economy, organizational culture, and how they react to regulation and supervision. Bridging the political economy and economic sociology of organizations, this thesis explores variations in how commercial banks account for decarbonization. The study offers a new conceptualization and measurement of decarbonization in the banking sector. It relies on qualitative comparative analysis of 120 banks and delves into specific case studies.