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Relating Financial Systems to Sustainability Transitions: Challenges, Demands and Dimensions

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  • Chantal P. Naidoo

    (SPRU, University of Sussex, UK)

Abstract

The Paris Climate Agreement, SDGs and Addis Ababa Action Agenda call for the financial system's approach to sustainability and climate breakdown to be "consistent and integrated". So far, sustainability transitions (ST) research fails to engage with such calls, offering limited analyses and conceptualisation of financial systems and transition processes. In this paper, a scoping review of finance and ST research shows a polarised context, ranging from nascent orthodox to critical analysis with limited cross-engagement. The paper applies a novel approach towards bridging the polarity; by interpreting the characteristics of the sustainability transition process from the perspective of the demands, it places on the financial system. Five initial demands emerge - directional changes, temporal dynamics, co-existent systems impact, contested social context and contextual experimentation. Finally, the paper offers initial dimensions for scholars to engage in for informing the response of financial systems to the demands of sustainability transitions.

Suggested Citation

  • Chantal P. Naidoo, 2019. "Relating Financial Systems to Sustainability Transitions: Challenges, Demands and Dimensions," SPRU Working Paper Series 2019-18, SPRU - Science Policy Research Unit, University of Sussex Business School.
    • Handle: RePEc:sru:ssewps:2019-18
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    2. Paul Dewick & Magnus Bengtsson & Maurie J. Cohen & Joseph Sarkis & Patrick Schröder, 2020. "Circular economy finance: Clear winner or risky proposition?," Journal of Industrial Ecology, Yale University, vol. 24(6), pages 1192-1200, December.
    3. Aghilasse Kashi & Mohamed Eskandar Shah, 2023. "Bibliometric Review on Sustainable Finance," Sustainability, MDPI, vol. 15(9), pages 1-30, April.
    4. Gregor Semieniuk & Emanuele Campiglio & Jean‐Francois Mercure & Ulrich Volz & Neil R. Edwards, 2021. "Low‐carbon transition risks for finance," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 12(1), January.
    5. Geddes, Anna & Schmidt, Tobias S., 2020. "Integrating finance into the multi-level perspective: Technology niche-finance regime interactions and financial policy interventions," Research Policy, Elsevier, vol. 49(6).
    6. Monk, Alexander & Perkins, Richard, 2020. "What explains the emergence and diffusion of green bonds?," Energy Policy, Elsevier, vol. 145(C).

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