A Quiet Revolution: Central Banks, Financial Regulators, and Climate Finance

Round 1

Reviewer 1 Report

Line 19: CBFR not explained yet.

Line 27: Beginning a scientific paper with a recommendation is not quality science. Arguing that there is a single solution to a problem is unscientific. The argument is based on the citation to a non-blind non-peer reviewed publication. How about we listen to the results of the research before the recommendations based on them?

Line 30: This recognition of the central importance requires, at the very least, a citation.

Lines 21, 31 and elsewhere: grammatically, subject and sentence verb should not be separated by a comma.

Line 35: Unnecessary new term, with a literary flare, that is based on a working paper, not a peer reviewed scientific source.

Line 49: So I have to go read Section 3 and come back here to see what studies you refer to in Line 54? An introduction should show what research has been done on a subject and finding a research gap. So far, this manuscript has not done that. The introduction so far has been based on non-scientific literature.

 Line 54: Both fine grained and wide-angled? Sorry, this is more like smoke and mirrors.

Line 63: The article´s approach is to explain an argument? How does the evidence fit into this?

Line 92: SEC not explained. A New York Times reference is not scientific evidence for the argument made.

In general, the conclusion does not do the job of placing the manuscript in a line of research. It is more like gray literature trying to find its way into peer reviewed science, with us reviewers as gatekeepers trying to prevent it.

Line 102: What you mention is not participant observation. What was the information-gathering procedure?

Materials and methods: this has to go beyond just data gathering. How was the data processed and interpreted?  

Line 124: “Painfully slow” is a value judgment, with no place in quality science.

Line 125: The numerous works would have to be cited.

Line 198: From background to discussion? The article skipped the results.

The rest of the manuscript does a poor job of presenting evidence, mixing available data with predictions for the future. Just to give a couple of examples: 1) It is doubtful that… [Line 274], 2) regulatory mechanisms will be necessary… [Line 322].

The conclusion is not based on the evidence presented. This is the opening line on Line 762: “There is overwhelming evidence that the free market cannot deliver a low carbon financial revolution”. Was the objective of the research to find out if the market can deliver a low carbon financial revolution?

I´m going to leave the criticism here, because the topic is very important and research is necessary in this line. More importantly, action is needed, not just knowledge. Here are some ideas for a major revision:

• Follow a grounded theory method. Prepare a scientific model that explains the main trends and then present the data in terms of the categories and their interrelations in the model.
• Process the eighteen interviews following a more scientific approach. It could be grounded theory, but there is a wide array of qualitative methodologies.
• Publish the article as gray literature.

My best wishes.

Author Response

Line 19: CBFR not explained yet.

Now inserted in full

Line 27: Beginning a scientific paper with a recommendation is not quality science. Arguing that there is a single solution to a problem is unscientific. The argument is based on the citation to a non-blind non-peer reviewed publication. How about we listen to the results of the research before the recommendations based on them?

But I am not making a recommendation as would be abundantly clear had the reviewer read as far as section 2.2, or even as far as lines 67-71. And the reference is not to a working paper but to a report of the prestigious United Nations Environment Program. It is an innocuous statement providing context concerning what the paper purports to achieve. And within social science there is no constraint in referring to papers that are not double blind reviewed.

Line 30: This recognition of the central importance requires, at the very least, a citation.

Citation added.

Lines 21, 31 and elsewhere: grammatically, subject and sentence verb should not be separated by a comma.

Noted and incorporated

Line 35: Unnecessary new term, with a literary flare, that is based on a working paper, not a peer reviewed scientific source.

The UNEP Report from which the term is borrowed is authoritative and not a working paper. In any event, it is a matter of judgement whether using the term used by the UNEP report and elsewhere, is unnecessary.

Line 49: So I have to go read Section 3 and come back here to see what studies you refer to in Line 54? An introduction should show what research has been done on a subject and finding a research gap. So far, this manuscript has not done that. The introduction so far has been based on non-scientific literature.

With respect, an introduction should foreshadow the arguments made in the body of the paper, not reproduce the latter.

 Line 54: Both fine grained and wide-angled? Sorry, this is more like smoke and mirrors.

It is possible both to examine detail and the big picture. It just requires some mental agility

Line 63: The article´s approach is to explain an argument? How does the evidence fit into this?

I do not understand the comment but I have amended the first three words of the sentence to assist clarity.

Line 92: SEC not explained. A New York Times reference is not scientific evidence for the argument made.

I have added full title of SEC. The NY Times reference draws in extensive interviews and detailed sources all referred to in the report. Again perhaps the referee comes from a very different discipline but in social science there is nothing inappropriate in referring to a piece of high quality investigative journalism, fully documenting its sources.

In general, the conclusion does not do the job of placing the manuscript in a line of research. It is more like gray literature trying to find its way into peer reviewed science, with us reviewers as gatekeepers trying to prevent it.

No reasons are given for this gratuitous assertion. In contrast reviewer 2 refers to the “excellent introduction”.

Line 102: What you mention is not participant observation. What was the information-gathering procedure?

Perhaps the reviewer comes from a different discipline but in sociology participant observation refers to a technique of field research, by which an investigator (participant observer ) studies the life of a group by sharing in its activities. This is precisely what the author did in becoming a member of, and participating in the activities of, the Australian Sustainable Finance Initiative

Line 124: “Painfully slow” is a value judgment, with no place in quality science.

I am simply providing the broader context: a transition which has so far seen only one or two percent of global institutional investment being invested in low carbon assets can legitimately be descripted as painfully slow. But I have substituted ‘extremely’ for ‘painfully’.

Line 125: The numerous works would have to be cited.

Reference 10 summarises these works.

Line 198: From background to discussion? The article skipped the results.

I have addressed this fully in my response to reviewer 2 under their heading: A relevant question about the article Sections 4 and 5 of the revised version are headed “Results and Discussion”

The rest of the manuscript does a poor job of presenting evidence, mixing available data with predictions for the future.

No evidence is provided to support this assertion beyond two purported examples, neither of which support the reviewer’s statement. These are:: 1) It is doubtful that… [Line 274], “

But had the reviewer read further, they would have found that lines 279-304 provide detailed reasons supporting the statement at line 274.

The reviewer’s second purported example is “2) regulatory mechanisms will be necessary… [Line 322].”

The offending line states that as “voluntarism has such a disappointing track record [3], various regulatory mechanisms will be necessary”. I am at a loss to identify the problem here. There is overwhelming evidence as to the failures of voluntarism and I cite a definitive and recent empirical piece drawing evidence from multiple OECD countries to support this proposition. If voluntarism fails then only two options are available. Non-intervention (ie leave the social problem unaddressed) or intervention by more effective means than voluntarism. Conventionally, this involves regulation in some form. The more important question, and the one which I was leading into, is what forms of regulation will be must effective and efficient. This is regulation 101 and not something I would normally dwell on.

The conclusion is not based on the evidence presented.

Not so. The reviewer simply quotes the opening line on Line 762: “There is overwhelming evidence that the free market cannot deliver a low carbon financial revolution”. Was the objective of the research to find out if the market can deliver a low carbon financial revolution?

To which the answer is ‘no, of course not’. And had the reviewer read section 2.2 they would know that. I am simply providing a context for summarising the findings and conclusions, which I go on to do.

Finally the reviewer suggests the use of grounded theory or a wide array of qualitative methodologies. but I have already used two qualitative methodologies: interviews and participant observation, in tandem with a synthesis approach.

I would not find it acceptable to publish the article as grey literature.

Reviewer 2 Report

Dear authors,

After read your article I have the following questions about it:

Abstract

I didn't like this abstract. It is very long and very vague. A good abstract should indicate the objective of the article, the methodology, the main results, the main theories of research and the contributions to the evolution of knowledge.

1. Introduction

Excellent introduction. I practically summarize the whole article and what the researchers want. This introduction is a good example for all researchers to follow.

2. Materials and methods

This being the section of the methodology should appear in point 3. In point 2 should appear everything that is in point 3 and that is related to the Literature Review. Only after the Literature Review the authors must present the Research Methodology.

A relevant question about the article: Sections 5 and 6 arise from the research and are the results of the literature review carried out? These sections appear isolated and do not understand where they come from. It is necessary that the authors manage to organize the article in order to understand where each section comes from. I consider that these two sections correspond to the Search Results. If this is true, you should create a section that you can call Results and Discussion.

Note: The authors have to make an effort to organize the article in order to make it less confusing and at the same time easier to read.

To review: I do not agree that point 4 belongs to any discussion. This point is a continuation of the Literature Review. Authors must correct the organization of the article.

7. Conclusions

I like the text, well elaborated, but it appears like that without really understanding why these are the conclusions and not others. And what are the contributions? What are the theoretical implications?

In general:

a) The topic of the article is very interesting but its information is poorly organized;

b) The authors should better clarify the readers about how the topics covered in the different sections were obtained. Based on what research?

c) The sections of the paper must be renumbered and reorganized.

d) Please, explain better the methodology and analysis and analysis obtained.

I really wanted to accept this article now, but unfortunately I can't do it. This journal wish exigent reviewers  and to ensure that authors can present articles of great quality.

In that sense, I ask you to take my opinions in consideration and improve this work, which is very promising.

I wish the authors the best of luck.

 

Formal aspects:
1-Correct citations according to the journal rules (example, see Breitenstein et al’s 2019 - line 171). Review the citations with official formatting.

Author Response

Abstract

I didn't like this abstract. It is very long and very vague. A good abstract should indicate the objective of the article, the methodology, the main results, the main theories of research and the contributions to the evolution of knowledge.

I have rewritten the abstract to take account of this criticism

1. Introduction

Excellent introduction. I practically summarize the whole article and what the researchers want. This introduction is a good example for all researchers to follow.

2. Materials and methods

This being the section of the methodology should appear in point 3. In point 2 should appear everything that is in point 3 and that is related to the Literature Review. Only after the Literature Review the authors must present the Research Methodology.

I have accepted this recommendation and changed the sequence of points 2 and 3.

A relevant question about the article: Sections 5 and 6 arise from the research and are the results of the literature review carried out? These sections appear isolated and do not understand where they come from. It is necessary that the authors manage to organize the article in order to understand where each section comes from. I consider that these two sections correspond to the Search Results. If this is true, you should create a section that you can call Results and Discussion.

I have restructured these sections (which now become sections 4 and 5) providing an introduction which contextualises the sections and does precisely what the referee suggests. And I have taken up their suggestion to have a single Results and Discussion section and explained in the text why I have done so

Note: The authors have to make an effort to organize the article in order to make it less confusing and at the same time easier to read.

I agree and I have done so as indicated above.

To review: I do not agree that point 4 belongs to any discussion. This point is a continuation of the Literature Review. Authors must correct the organization of the article.

I agree. I have moved this to section 2.2

7. Conclusions

I like the text, well elaborated, but it appears like that without really understanding why these are the conclusions and not others. And what are the contributions? What are the theoretical implications?

I have flagged where the conclusions fit with the preceding text, referring (cross-referencing) in particular to the preceding discussion regarding the limits of free markets and the roles of cross-cutting and sector-specific interventions (ie sections 4 and 5) in particular. I have also indicated where (in the last page) I flag potential future developments and their implications. In formal presentations of the research, this has been particularly well received

In general:

1. The topic of the article is very interesting but its information is poorly organized;

I have now addressed this concern in the ways indicated above 

1. The authors should better clarify the readers about how the topics covered in the different sections were obtained. Based on what research?

I have done so (eg new introduction to section 4 and also expanded the methodology section as described at (d) below to make this clear.

For example , I make clear that Sections 4 and 5 involve a synthesis: they draw from the interviews and participant observation and build on the existing climate finance literature and injecting insights from the sphere of regulatory governance and from behavioural and cultural studies following the methodogical approach articulated immediately above. As such, the results and discussion sections are integrated rather than discrete.

1. The sections of the paper must be renumbered and reorganized.

Done, details as above. 

1. Please, explain better the methodology and analysis and analysis obtained.

I have amended the methodology section, first restating the focus of the article, then the need for three different methodologies: interviews, participant observation and document analysis. I have elaborated on the issues canvassed in interviews and in participant observation (see ‘lines of inquiry”).  I have also made clear that the aim of the interviews and participant observation was to facilitate empirically grounded analysis, through which the strengths and weaknesses of potential regulation and governance mechanisms can be better understood, thereby facilitating the central normative agenda of the article:  better policy design. I have then articulated  how the article draws on different bodies of literature to advance that agenda.

Reviewer 3 Report

Main Comments

The author should be commended for employing data from central bank and financial regulator in order to analyse climate finance. Although these data present a rich source of information for studying climate finance, some questions remain unanswered, for example who are the 18 members from the central banks?

The author may consider moving section two to section three and section three to section two.  

 

Minor comments

Page 4, Line 183, delete "3" in practice3

Page 5, Line 196, add i before t in "...in the wind, t is ..."

Author Response

The author should be commended for employing data from central bank and financial regulator in order to analyse climate finance.

 Although these data present a rich source of information for studying climate finance, some questions remain unanswered, for example who are the 18 members from the central banks?

With respect, the researcher followed the normal conventions for interview based research in social science, which is to guarantee the anonymity of both the interviewee and their organisation, as required by his university’s Human Ethics Research Committee.

The author may consider moving section two to section three and section three to section two.  

 I agree and have done so.

Minor comments

Page 4, Line 183, delete "3" in practice3

done

Page 5, Line 196, add i before t in "...in the wind, t is ..."

done

Round 2

Reviewer 1 Report

The manuscript was presented in unreadable form, with author´s personal notes still on it. The readable parts are the ones that remain unchanged, and where my previous comments still apply. 

Author Response

Line 19: CBFR not explained yet.

Now clarified

Line 27: Beginning a scientific paper with a recommendation is not quality science. Arguing that there is a single solution to a problem is unscientific. The argument is based on the citation to a non-blind non-peer reviewed publication. How about we listen to the results of the research before the recommendations based on them?

I am simply paraphrasing the conclusion of the world’s leading scientific authority on climate change: the Intergovernmental Panel on Climate Change (as per endnote) and multiple others. This is uncontroversial as a statement of the implications of the science.

Line 30: This recognition of the central importance requires, at the very least, a citation.

Citation added.

Lines 21, 31 and elsewhere: grammatically, subject and sentence verb should not be separated by a comma.

Noted and incorporated

Line 35: Unnecessary new term, with a literary flare, that is based on a working paper, not a peer reviewed scientific source.

The UNEP Report from which the term is borrowed is authoritative and not a working paper. In any event, it is a matter of judgement whether borrowing the term used by the UNEP report and elsewhere, is unnecessary.

Line 49: So I have to go read Section 3 and come back here to see what studies you refer to in Line 54? An introduction should show what research has been done on a subject and finding a research gap. So far, this manuscript has not done that. The introduction so far has been based on non-scientific literature.

With respect, an introduction should foreshadow the arguments made in the body of the paper, not reproduce the latter. Contrast reviewer 2 who comments on the “Excellent Introduction”.

 Line 54: Both fine grained and wide-angled? Sorry, this is more like smoke and mirrors.

It is possible both to examine detail and the big picture. It just requires some mental agility

Line 63: The article´s approach is to explain an argument? How does the evidence fit into this?

I do not understand the comment but I have amended the first three words of the sentence to assist clarity.

Line 92: SEC not explained. A New York Times reference is not scientific evidence for the argument made.

I have added full title of SEC. The NY Times reference draws in extensive interviews and detailed sources all referred to in the report. Again perhaps the referee comes from a very different discipline with different conventions but in social science there is nothing inappropriate in referring to a piece of high quality investigative journalism, fully documenting its sources.

In general, the conclusion does not do the job of placing the manuscript in a line of research. It is more like grey literature trying to find its way into peer reviewed science, with us reviewers as gatekeepers trying to prevent it.

No reasons are given for this gratuitous assertion. In contrast reviewer 2 refers to the “excellent introduction”.

Line 102: What you mention is not participant observation. What was the information-gathering procedure?

Perhaps the reviewer comes from a different discipline but in sociology participant observation refers to a technique of field research, by which an investigator (participant observer ) studies the life of a group by sharing in its activities. This is precisely what the author did in becoming a member of, and participating in the activities of, the Australian Sustainable Finance Initiative

Line 124: “Painfully slow” is a value judgment, with no place in quality science.

A transition which has so far seen only one or two percent of global institutional investment being invested in low carbon assets can legitimately be descripted as painfully slow. But I have substituted ‘extremely’ for ‘painfully’.

Line 125: The numerous works would have to be cited.

Reference 10 summarises these works.

Line 198: From background to discussion? The article skipped the results.

Not so. I have addressed this fully in my response to reviewer 2 under their heading: A relevant question about the article

The rest of the manuscript does a poor job of presenting evidence, mixing available data with predictions for the future.

No evidence is provided to support this assertion beyond two purported examples, neither of which support the reviewer’s statement. These are:: 1) It is doubtful that… [Line 274], “

But had the reviewer read further, they would have found that lines 279-304 provide detailed reasons supporting the statement at line 274.

The reviewer’s second purported example is “2) regulatory mechanisms will be necessary… [Line 322].”

The offending line states that as “voluntarism has such a disappointing track record [3], various regulatory mechanisms will be necessary”. I am at a loss to identify the problem here. There is overwhelming evidence as to the failures of voluntarism and I cite a definitive and recent empirical piece drawing evidence from multiple OECD countries to support this proposition. If voluntarism fails then only two options are available. Non-intervention (ie leave the social problem unaddressed) or intervention by more effective means than voluntarism. Conventionally, this involves regulation in some form. The more important question, and the one which I was leading into, is what forms of regulation will be must effective and efficient. This is regulation 101 and not something I would normally dwell on.

The conclusion is not based on the evidence presented.

Not so. The reviewer simply quotes the opening line on Line 762: “There is overwhelming evidence that the free market cannot deliver a low carbon financial revolution”. Was the objective of the research to find out if the market can deliver a low carbon financial revolution?

To which the answer is ‘no, of course not’. I am simply providing a context for summarising the findings and conclusions, which I go on to do.

Finally the reviewer suggests the use of grounded theory or a wide array of qualitative methodologies. but I have already used two qualitative methodologies: interviews and participant observation, in tandem with a synthesis approach.

I would not find it acceptable to publish the article as grey literature.

Reviewer 2 Report

Dear authors,

Congratlations. Now your work were improved and better fit to publish in this very important journal.

I wish a best regards.

Author Response

Abstract

I didn't like this abstract. It is very long and very vague. A good abstract should indicate the objective of the article, the methodology, the main results, the main theories of research and the contributions to the evolution of knowledge.

Fair point. I have rewritten the abstract to take account of this criticism

1. Introduction

Excellent introduction. I practically summarize the whole article and what the researchers want. This introduction is a good example for all researchers to follow.

2. Materials and methods

This being the section of the methodology should appear in point 3. In point 2 should appear everything that is in point 3 and that is related to the Literature Review. Only after the Literature Review the authors must present the Research Methodology.

I have accepted this recommendation and changed the sequence of points 2 and 3.

A relevant question about the article: Sections 5 and 6 arise from the research and are the results of the literature review carried out? These sections appear isolated and do not understand where they come from. It is necessary that the authors manage to organize the article in order to understand where each section comes from. I consider that these two sections correspond to the Search Results. If this is true, you should create a section that you can call Results and Discussion.

Note: The authors have to make an effort to organize the article in order to make it less confusing and at the same time easier to read.

I have made major changes to the structure of the article including a Results and Discussion section reorganised specifically t

To review: I do not agree that point 4 belongs to any discussion. This point is a continuation of the Literature Review. Authors must correct the organization of the article.

I agree and have done so

7. Conclusions

I like the text, well elaborated, but it appears like that without really understanding why these are the conclusions and not others. And what are the contributions? What are the theoretical implications?

Round 3

Reviewer 1 Report

Same version

Author Response

Reviewer Report Round 3, Response

Line 19: CBFR not explained yet.

Now clarified

Line 27: Beginning a scientific paper with a recommendation is not quality science. Arguing that there is a single solution to a problem is unscientific. The argument is based on the citation to a non-blind non-peer reviewed publication. How about we listen to the results of the research before the recommendations based on them?

I have amended this sentence to make clear I am summarising the view ot the IPCC, the world’s leading independent panel of climate scientists.

Line 30: This recognition of the central importance requires, at the very least, a citation.

Citation added.

Lines 21, 31 and elsewhere: grammatically, subject and sentence verb should not be separated by a comma.

Noted and incorporated

Line 35: Unnecessary new term, with a literary flare, that is based on a working paper, not a peer reviewed scientific source.

The UNEP Report from which the term is borrowed is authoritative and not a working paper. The term itself has entered the lexicon

Line 49: So I have to go read Section 3 and come back here to see what studies you refer to in Line 54? An introduction should show what research has been done on a subject and finding a research gap. So far, this manuscript has not done that. The introduction so far has been based on non-scientific literature.

With respect, an introduction should foreshadow the arguments made in the body of the paper, not reproduce the latter. Contrast reviewer 2 who comments on the “Excellent Introduction”.

 Line 54: Both fine grained and wide-angled?

Now modified to improve clarity

Line 63: The article´s approach is to explain an argument? How does the evidence fit into this?

I have amended the first three words of the sentence to assist clarity.

Line 92: SEC not explained. A New York Times reference is not scientific evidence for the argument made.

I have added full title of SEC and explained the context.

In general, the conclusion does not do the job of placing the manuscript in a line of research. It is more like grey literature trying to find its way into peer reviewed science, with us reviewers as gatekeepers trying to prevent it.

No reasons are given for this assertion. In contrast reviewer 2 refers to the “excellent introduction”.

Line 102: What you mention is not participant observation. What was the information-gathering procedure?

Perhaps the reviewer comes from a different discipline but in sociology participant observation refers to a technique of field research, by which an investigator (participant observer ) studies the life of a group by sharing in its activities. This is precisely what the author did in becoming a member of, and participating in the activities of, the Australian Sustainable Finance Initiative

Line 124: “Painfully slow” is a value judgment, with no place in quality science.

I have substituted ‘extremely’ for ‘painfully’.

Line 125: The numerous works would have to be cited.

Reference 10 summarises these works.

Line 198: From background to discussion? The article skipped the results.

I have added a Results section (see further my response to reviewer 2 under their heading: A relevant question about the article)

mixing available data with predictions for the future. (i)) It is doubtful that… [Line 274], “

lines 279-304 now provide detailed reasons supporting the statement at line 274.

 “2) regulatory mechanisms will be necessary… [Line 322].” as “voluntarism has such a disappointing track record [3], various regulatory mechanisms will be necessary”.

I have cited a definitive and recent empirical piece drawing evidence from multiple OECD countries to support this proposition.

The conclusion is not based on the evidence presented.

Amended to make clear I am providing a context for summarising the findings and conclusions, which I go on to do.