Implications of financialisation for sustainability

: Over the last thirty years, the historical increasing expansion of financial systems has experienced a phase of acceleration, the second one after the industrial revolution. During this phase of financialisation, the logic of finance has acquired a significant role in economic decisions of all broad institutional elements: financial and non-financial corporations, government and households. Usually formulated with a negative connotation, the notion of financialisation as an “excessive” growth of finance, however, remains elusive and with vague operative implications. We first discuss different features, manifestations and processes which are encompassed in the second financialisation. We then review the literature on its implications by distinguishing the effects on endogenous sustainability, namely on the functioning of financial systems, and the effects on the social and economic spheres: productive investments, human capital, distribution, resilience and exposure to shocks and to systemic risks. Finally, our critical survey focuses on a recent hot debate on the role of financialisation in shaping the incentives for environmental protection, and in restructuring the interests and power equilibrium among different stakeholders on the uses – current, future and speculative – of environmental goods and services.