Paper short abstract:

The paper concerns the role of auditors at the intersection of multiple modes of environmental governance. It examines the issuance of Chinese green bonds in Europe by asking how their 'life cycle' is negotiated across differential processes of certification that blur the public-private divide.

Paper long abstract:

In the attempt to address climate change by mobilising financial resources, the EU commission is producing a new framework for sustainable finance. This taxonomy performs new ideas of sustainability at a global level and designates a key role to auditors and revisors. In this process, the operationalisation of green financial instruments is increasingly assigned to organisations and market-based practices that - via legitimisation by auditing firms such as the Big Four and their expertise- are blurring the public-private divide. By focusing on the specific issuance of green bonds by European and Chinese public and private actors, we ask how audit firms intervene in processes of certification and standardisation of green financial products across boundaries.

Specifically, the paper aims at analysing the distinct EU-China modes of governance and their evolution. While in Western markets, auditing figures as tools of regulation to 'harness' the green financial sector, the Chinese case evolves from opposite premises, with auditors seemingly occupying interstices of power out the state control. Drawing on the work of Michael Power (1997), we investigate whether an "expectation gap" occurs not only in the realization of the EU regulatory programme through auditors practices and technologies but also in the implementation of a global green finance common language - how firms are translating asymmetries of sustainability among different forms of capital and sovereign institutions. Specifically, using a multidisciplinary lens we analyse the Chinese-EU distinctive green bonds frameworks and standards to grasp existing frictions between actors and their diverging interests and worldviews.