The world is experiencing multiple crises: a financial crisis, an energy crisis, a climate crisis, a food crisis, and a water crisis. One may even consider the collective inability to deal with these issues a crisis in human civilization. All these crises appear to signal the non-sustainability of the way our economy and society are organized. As finance is at the very core of the globalized socio-economic system, and many have blamed it for contributing to the various crises in various ways, the financial sector is an essential place to start. However, so far the current financial crisis has led to proposals, such as shoring up reserve requirements, supervising banks, and improving risk management, for modification of the system within the existing paradigm of efficient markets. This project moves ahead by taking a step back, discussing the fundamental functions a financial system should provide, and putting special emphasis on the linkages between the financial sector and the real economy.
Sustainable Finance Lab Research Program