New FC4S report “Nudging the Financial System” Invitation to Mahenau Agha

Jay Owen Green Prosperity, SRI/ESG News, Trendspotting, Beyond GDP, Transforming Finance, Latest Headlines

“Ethical Markets welcomes this new report from UNDP FC4S and the Inquiry: Design of a Sustainable Financial System.  We have participated in and fully support all the ground-breaking reports the Inquiry (www.unepinquiry,org) have produced since its founding in 2014.  Today, this latest report “NUDGING THE FINANCIAL SYSTEM“ moves another light year ahead of all the mainstream financial reporting, defunct textbook models and obsolete algos still steering our economies over the cliff of climate risks!

This report uses multi-disciplinary systems and network analyses to pinpoint all the new nodes of progress in decision-making now needed by all sectors. The network maps illustrate clearly in which ways nodes across the world are connecting to amplify the goals of the UN’s SDGs, which we promote, and which nodes are still floundering in isolation from all this new scientific knowledge that mainstream asset management models still ignore.

This type of analysis comports with our research and futurist approaches, scenario-building, illustrating options for accelerating the global transition from fossilized19th and 20th century technologies and models to the SDGs more inclusive, cleaner, greener, more sustainable, knowledge-richer societies of what we call this 21st century Solar Age.  Our “Transitioning to Science-Based Investing, 2019-2020“ identified a key overall financial risk now over-hanging markets as SCIENCE DENIAL (not only climate-denial and still permitting “externalities”), but ignoring all the opportunities that our current knowledge of ecosystems and technologies offer to address the climate crises, of which the current pandemic is but one.  This report is essential reading and we will reference it prominently in our forthcoming e-textbook: “MAPPING THE GLOBAL GREEN TRANSITION,2009-2020“!

~Hazel Henderson, Editor“

The International Network of Financial Centres for Sustainability’s (FC4S) latest report maps out and analyses the complex array of relationships of sustainable finance partnerships while highlighting how the sustainable finance ecosystem can better work together to achieve the global development goals of the next decade. The report, which is the result of a collaboration between the United Nations Environment Programme (UNEP) Inquiry, FC4S and the United Nations Development Programme Finance Sector Hub (UNDP FSH) does so by identifying exactly how these networks function and the interplay between the different initiatives.

“Nudging the Financial System: A network analysis approach”, focuses on efforts currently undertaken by individual countries, regional groups, multilateral development banks (MDBs), international organizations (IOs), private sector entities, and non-governmental organizations (NGOs).

The current global sustainable finance network is composed of 115 different “partnerships,” 5,181 constituent members and more than 10,000 connections. Based on network analytics, the report shows that 75% of network participants is connected to only one partnership and only 13% of the network participants is connected to three or more other partnerships. This shows that the core of the sustainable finance agenda is mainly driven by a small number of network constituents, including financial institutions, regulators and MDBs.

An increasing number of partnerships at the international, national and market-based levels have driven the overall transition towards a sustainable financial system capable of delivering a sustainable real economy. The growth of sustainable finance partnerships at these three levels between 1990 and 2019 displays an exponential trend, with a significant acceleration in the number of initiatives established from around 2009 onwards. During the first two decades, initiatives were established at a rate of approximately 1 per year, but for the 2009-2019 period, this rate increased to 7.4 per year.

The report is the first global mapping and analysis of sustainable finance partnerships and identifies exactly how these networks function and the interplay, between the different initiatives. It’s a great read for professionals in the field who have tried to untangle the knots of various sustainable finance partnerships and networks.

Read the full report here.