 "climate, green earth")
By M S Sahoo and C K G Nair Governments, financial market regulators, and civil society organisations increasingly view financial markets as the key to achieving a greener planet. This rests on the premise that investors prioritise public interest over their private gains, aligning capital flows with sustainability goals. While finance certainly has a role, it cannot be the fulcrum of climate action for several reasons.
Financial markets operate on a risk-return calculus. They allocate resources among competing businesses based on risk-adjusted returns, which, in turn, reflect prices in product markets, and those prices reflect consumer choices. If a
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