Relating Financial Systems to Sustainability Transitions: Challenges, Demands and Dimensions
54 Pages Posted: 28 Aug 2019
Date Written: August 2019
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.
Keywords: Sustainability transitions, Financial systems, Climate breakdown, Characteristics of sustainability transitions, Demands of sustainability transitions
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