Imagining a sustainable financial system allows us to move beyond conventional wisdom. Imagining a Sustainable Financial System sets out that a sustainable financial system would be one that serves the long-term needs of a healthy real economy, an economy that provides decent, productive and rewarding livelihoods for all, and ensures that the natural environment on which we all depend remains intact, and so able to support the needs of this and future generations.
It offers a framework for considering the performance of a sustainable financial based on two axes, its impact on social and environmental systems (‘sustainability impacts’) and its own sustainability in the face of exogenous shocks induced by these factors.
This paper was presented at the UNEP Inquiry/Centre for International Governance Innovation Academic Symposium on the Design of a Sustainable Financial System, held in Waterloo Canada in December 2014.
Adequate, appropriate finance is crucial for Africa’s sustainable development. Its availability depends on African countries developing financial systems that can effectively draw on and deploy to best use domestic and international, private and public sources. With the growing importance, in particular, of both domestic sources of finance, and private investment (both domestic and international), it is critically important that Africa’s financial and capital markets develop in ways that will promote sustainable development on the continent.
Aligning a financial system with sustainable development does not happen automatically. The increasing scale and sophistication of Africa’s financial system alone will not achieve it. Indeed, the international evidence amply demonstrates that financial and capital markets can — and often do — become detached and fail to adequately serve the long-term needs of inclusive sustainable development.