Financial Supervision for the Green Transition: Comparative Insights From the EU, Hungary, and Singapore
Publication Name: Thunderbird International Business Review
Publication Date: 2025-01-01
Volume: Unknown
Issue: Unknown
Page Range: Unknown
Description:
This paper examines how financial supervisory authorities integrate Environmental, Social, and Governance (ESG) objectives into their regulatory mandates amid the accelerating green transition. It aims to understand how institutional variation shapes supervisory strategies for sustainable finance. The study employs a qualitative, comparative case study design across three jurisdictions: the European Union, Hungary, and Singapore. Drawing on regulatory theory and document analysis, this study identifies the key institutional logics, instruments, and governance mechanisms through which ESG considerations are embedded in financial supervision. The analysis reveals three supervisory models: the EU's rule-based legal harmonization through taxonomy and disclosure mandates, Hungary's responsive approach led by the central bank using soft tools and innovation, and Singapore's principle-based framework emphasizing strategic guidance and market collaboration. These pluralistic pathways highlight that ESG integration is shaped by legal mandates, legitimacy concerns, and adaptive governance. This study provides insights to policymakers and supervisors seeking to align financial oversight with sustainability objectives. This emphasizes the importance of institutional flexibility, regulatory legitimacy, and hybrid governance in designing effective ESG supervision frameworks. This study contributes to the literature on sustainable finance and regulatory governance by offering a comparative perspective on how financial supervision evolves in response to ESG risks. It advances a novel typology of supervisory models that can inform future regulatory design and policy debates.
Open Access: Yes
DOI: 10.1002/tie.70039