States' and Issuers' Liabilities under Climate Finance Obligations

“Climate finance is not charity, it’s an investment. Climate action is not optional, it’s an imperative. Both are indispensable to a livable world for all humanity and a prosperous future for every nation on Earth”.1 Under the banner of these inspiring words from UN Secretary-General António Guterres, COP 29 in Baku opened with a special focus on the role of sustainable finance in combating climate change and creating a more prosperous future. Sustainable finance longs to provide an antidote to modern capitalism grounded in the vital necessity for urgent and relentless economic growth at any cost, capable of generating short-term wealth but inexorably dependent on the progressive degradation of our planet’s natural resources. The ambition of sustainable finance is to enable those who use it to accrue financial wealth while simultaneously affecting positive changes in the world around them. But does sustainable finance truly possess the necessary tools to accomplish these ambitious goals? Beneath the shadow of the ongoing imperative to mitigate the deleterious effects of climate change, there has been a notable increase in declarations of intent by sovereign states and issuers of financial instruments with regard to the adoption of sustainable finance models. However, these declarations have not always been accompanied by substantive action. Indeed, markets are often characterized by unethical practices, and selfish commercial behavior may frequently prove profitable, at least in the short run. Traditional capitalism is a certainty: there will be casualties, but you will get rich. Sustainable finance, on the other hand, is a promise: if you play by its rules, you will be richer in the long run, and you will generate a positive impact on the world around you. However, for this promise to come true, a serious and shared commitment from all the parties involved is necessary, together with an effective system of sanctions that makes breaking the rules less convenient than following them. The present study will concentrate on the legal instruments designed to ensure that states and issuers comply with sustainable finance obligations, paying particular attention to the system of liabilities applicable in the event of non-compliance. Chapter 1 will analyze possible forms of liability that may be imposed on states under international law for non-compliance with climate finance obligations. Chapter 2 will instead focus on forms of issuer liability for non-compliance with European and Italian sustainable finance regulations. Chapter 3 will examine whether additional profiles of liability for company directors may arise from an evolutionary interpretation of the concept of corporate purpose more oriented towards sustainability principles. Finally, Chapter 4 will draw conclusions from the analysis carried out..