Subordinated agency and the grafting of sustainable finance regulations in south-east Asia

Abstract South-east Asia is often overlooked in debates about the rise of Asia in international financial affairs. Not only does the region occupy a subordinated space in global finance, it is also overshadowed in policy debates by the rise of China. Nevertheless, in recognizing regional diversity and emphasizing the duality of economic and ecological transition, south-east Asian countries have sought to claim developmental space in global finance to incorporate sustainability concerns in a distinctive manner. Our case focuses on the development of green taxonomies—classificatory schemes that set out how regulators define sustainable and green investment. We employ the notion of grafting to theorize instances of innovation via adaptation and changes to the source paradigm in the design of financial regulations. Using software-assisted qualitative content analysis, we demonstrate how south-east Asian countries have successfully challenged hegemonic understandings of finance based on profit maximization, emphasizing the importance of socio-economic development. They do so despite considerable pressure to align with global financial norms to further their integration with global markets. As such, the development of sustainable finance in the region is at least partly an instance of non-hegemonic agency in financial norm-making at the levels of both regulation and market practice.