Climate change and reflexive law: The EU sustainable finance action plan

This chapter examines the instruments suggested by the key policy document driving sustainable finance in the European Union, the Action Plan on Financing Sustainable Growth. It uses a reflexive law approach coupled with insights from epistemology. The chapter first discusses the Action Plan and the concept of reflexive law (which focuses on such epistemic instruments as disclosure, reporting, and labeling). It discusses a number of challenges the plan faces (about, e.g. investor ignorance, long-termism, scenario analysis, accounting standards). It then introduces an alternative to reflexive law (called “epistemic law”), and argues that disclosure, reporting, and labeling improve by taking into account insights from epistemology and social science concerning the form and content of information. The chapter’s recommendation is, in a slogan, to provide different information, and to provide information differently.