On a mission? Disentangling the role of state-owned investment banks’ mandate for climate action

State-owned investment banks (SIBs) are receiving increasing scholarly and political attention as focal actors within the climate transition. In Germany in particular, a diverse group of federal and state-level SIBs are adapting their operational business practices with reference to climate and sustainability challenges. In political economy scholarship, the drivers of this change are primarily attributed to banks’ mandates and their ‘derisking’ capacity in the field of climate finance. In this empirically-led contribution we scrutinize this primordial perception and argue for a more nuanced perception of SIBs’ capacity in climate finance. To this end, we provide an analysis of the development of the substantive mission as well as the state-market-configurations implied in German SIBs’ mandates, based on a survey of the 19 existing German SIBs and an in-depth qualitative investigation of four case studies among German SIBs. The results indicate that, in practice, SIBs seem not be confined to their regulatory mandate and that their role in climate finance indeed exceeds derisking dynamics.