A research programme on how financial systems can better contribute to the sustainable development of society, has been awarded a research grant of SEK 30 million over four years by Mistra, The Swedish Foundation for Strategic Environmental Research.

This research programme will investigate possibilities and limitations for how financial systems can contribute to the sustainable development of society. It will especially focus on what changes are needed to make financial systems more oriented towards sustainability. 

GEDB is a partner in this Mistra Financial Systems programme which will be hosted by Misum at the Stockholm School of Economics. Other partners are the Swedish House of Finance, KTH Royal Institute of Technology, Stockholm Environment Institute, London School of Economics, the ICMA Centre at Henley Business School along with Swesif and Statistics Sweden. GEDB science impact advisor Cecilia Repinski will take on the position as programme operations manager at Misum.

Financial institutions and markets have an enormous influence over the direction of commercial enterprise and therefore of modern economies and societies in general. In theory, financial markets are supposed to create social value by allocating capital to individuals and businesses that want to make productive use out of it. Yet, far too little capital is being allocated to progressive and sustainable efforts such as cleantech companies, renewable energy sources, and the like. 

However, the Paris COP meeting and the Sustainable Development Goals sends a clear message that world leaders will take concrete steps towards more sustainable economies. There is a growing recognition within the finance sector itself as well as its stakeholders that the transition to a greener economy will require large investments. 

"We need the finance sector onboard to help finance the transition to a low carbon and more resource efficient economy. MFS is designed to work closely with policy, industry and society and produce research that can lead to real change,” says Cecilia Repinski.

The programme will look on what can be done here and now within the current financial system to bolster efforts for sustainability. Furthermore it will investigate alternative financial systems – how the sector and the economy can be fundamentally restructured to be more conducive to sustainable development. 

The programme consists of a total of 5 work packages and 28 individual research projects. GEDB will be leading the work package Policy and transitions for sustainable finance. Within this a PhD-student will be employed who will analyse recent developments in "green” financial innovation, identify relevant governance dimensions and examine how these dimensions connect to social-ecological challenges.