One aim of sustainable finance regulation is to push companies towards activities that will be compatible with the target to limit global warming to 1.5 degrees Celsius above pre-industrial levels. This type of regulation – for example setting out classifications of what economic activities count as ‘green’ ¹ As in the European Union taxonomy for sustainable activities; see https://finance.ec.europa.eu/sustainable-finance/tools-and-standards/eu-taxonomy-sustainable-activities_en.  – seeks to encourage financing for activities and technologies that are clearly carbon neutral. But financial markets now increasingly focus on  transition finance as a component of the broader sustainable finance asset class. Transition finance refers, for example, to financing for emission reductions and low-carbon technologies in industries such as cement or steel, where no purely green technologies are readily available. Transition financing is also needed for energy companies in the process of switching to renewables and phasing out their fossil-fuel assets.