The finance function's role in EU Taxonomy work: A cross-sectional study on how sustainability and finance functions are organized around the EU Taxonomy

Abstract: This paper aims to fulfill three interrelated purposes by examining (i) how sustainability and finance functions are organized around EU Taxonomy work, (ii) what perspective the finance function has towards their potential involvement and role, and (iii) what the interactional dynamics between the two functions are. Through a qualitative cross-sectional case study, where the analysis is framed by Abbott's (1988) theory of inter-professional settlements and concept of jurisdictions, we contribute to the relatively underexplored research areas of organizations' sustainability work in general and the role of the finance function within such work in three main ways. Firstly, we find four different jurisdictional arrangements in which the sustainability and finance functions are organized around EU Taxonomy work, across which there is a spectrum of finance function involvement levels and roles. Secondly, our findings suggest that the finance function's perspective towards their potential role in EU Taxonomy work is that they should fully employ the type of role that they regularly take in other work. Thirdly, we find that the interactional dynamics within the jurisdictional arrangements build upon collaboration rather than conflict. Thus, our findings suggest an increasing finance function involvement in sustainability reporting with the new EU Taxonomy.