Regulatory Sandboxes for Sustainable Finance

The article delves into the potential of regulatory sandboxes to enhance the effectiveness of sustainable finance policies, that is, financial policies designed to fund sustainable projects and activities including the green transition. While acknowledging the significant regulatory advancements made by the EU, this analysis highlights persistent gaps-such as greenwashing, informational asymmetries and regulatory compliance burdens-that hinder the operationalization of sustainability goals. Drawing on a selected number of examples, we explain how regulatory sandboxes, through supervised experimentation, compliance guidance and close collaboration between regulators and market participants, can support the development of sustainable finance. This article contributes both to legal scholarship and policy literature on the regulation of sustainable finance and on regulatory experimentation. This article argues that regulatory sandboxes have the potential to reconcile the need to promote economic innovation with the promotion of specific public values (including sustainability), facilitate stakeholder dialogue, and generate operational solutions, particularly within the rapidly evolving domain of green fintech.