In this theme, finance and capital markets are studied and linked to the latest research on planet Earth as a system. With this combination, there are new opportunities for progressive social development in conjunction with the biosphere dynamics. This is uncharted terrain in research with enormous development potential.

Our ambition id for this research to help:

• Leverage the power of the financial sector for biosphere integrity and climate stability.

• Re-orient large-scale investment strategies for the benefit of both human and biosphere health.

As part of our work, we also study novel risks. The increasing complexity of the world today gives rise to a range of different negative outcomes, such as financial crises and volatility, global health crises, climate change, and global biosphere degradation. Traditionally such risks have been treated in isolation. However, recent research on, for example, systemic risk has begun to highlight the interconnectivity of risks across different systems. Under the umbrella of GEDB, we conduct research that addresses both finance and health risks as it relates to the biosphere.

Earth System Finance

The ambition of the Earth System Finance project is to bring new science-based perspectives to current discussions about the role of finance for sustainability. In particular we examine and elucidate the connections between capital markets to so called “Earth system tipping elements”.  The project identifies, maps out, and visualizes how global financial flows underpin large-scale modifications in the world’s ecosystems with repercussions for the stability of the Earth’s climate system.

Sleeping Financial Giants

The Sleeping Financial Giants is a sub-project under Earth System Finance that uses value chain analysis and trade data to identify financial institutions who, based on current ownership patterns, could play a particularly important role for steering away from irreversible large-scale environmental change and escalated global warming.

Development of Earth System savvy metrics for corporations and investors

This project is funded by Vinnova and centers on developing “Earth System savvy” metrics that can be used by corporations and investors to assess their impacts vis-à-vis key Earth System process. It aims to provide the necessary (but currently lacking) tool to assess to what degree individual businesses, and capital allocation strategies/portfolios are contributing to moving us away from, closer to, or further beyond well-known planetary boundaries.

Financial Dimensions of a key climate system “Wild Card”

This project focuses on exploring links between black carbon emission activities causing the brown cloud to specific and financial actors with the power to influence changing practices. The Atmospheric Brown Cloud (ABC) over South Asia is created by a range of airborne particles and pollutants from combustion, biomass burning and various industrial processes. The air-pollution (i.e. black carbon particles in the case of this research) has a significant effect on the climate change at large as well as on the health of local population and the biosphere. The project aims to link the process of the black carbon emissions to the finance sector relying on a combination of detailed information sources from several emission inventories. Furthermore, the analysis will examine value chains of economic sectors which are major contributors to the creation of ABC and examine corporate ownership and debt to understand the financial actors and flows underpinning key emitting sectors.

This project is led by researchers from Global Economic Dynamics and the Biosphere (GEDB) Programme, Stockholm Resilience Center, and Bolin Centre’s Department of Environmental Science and Analytical Chemistry (ACES). It also includes participants from the University of Saint Andrews, and will work in close collaboration with key Indian academic partners (currently under development).

Tax havens, international financial flows and global sustainability

This work explores how offshore jurisdictions subsidize environmental degradation and reduce transparency at a scale that has implications for the resilience of the Earth system. 

Integrating diverse thinking around risk and resilience

This research delves into the diversity of conceptualizations around the risk that exists in different academic disciplines and looks at how integrating these, together with resilience thinking, can pave the way for more holistic risk assessments that acknowledge the complex, intertwined nature of global systems today.

Closing the risk loop: reframing financial risk assessments

This work examines how financial risk is generally assessed, but also what the impacts of these current risk assessments may be on biosphere health and financial stability if we also account for interconnectivity between sectors through impacts mediated by Earth System processes. This research is closely connected to the GEDB research project on Earth System Finance.