Harnessing the financial industry to fund the building of a sustainable future

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#1

Dear Doughnut Economics friends,
Can we leverage the financial industry at a large scale to divert funds from the unsustainable economy and build the sustainable future? Every month most of us pay our utility bill, buy gasoline, make a car payment for an internal combustion engine, pay a garbage bill, and buy things we rarely use that sit in the garage/house. Doing so supports oil extraction, mining, deforestation, and the linear flow of materials from extraction to use to disposal.
We could divert part of this river of money (whether our 401k investments or monthly bills) which is currently propping up the dinosaur industries of oil, plastics, internal combustion engine vehicles, garbage companies, and consumer goods. If the financial industry gave more of us loans to pay for solar panels, electric cars, to businesses to pay for part-time sustainability project managers, for zero net energy retrofits of commercial buildings, to libraries to put in tool lending libraries/repair cafes, to businesses to start reusable transportation packaging take-back systems we could build a renewable, circular, sustainable economy. It would be great if the loans were just above inflation instead of 8%, 10% or higher.
How do we turn the non-sustainable industries into a bubble that pops like the 1970s commodities, 1980s S&L, 1990s dot com, 2000s real estate and financial derivatives bubbles? Any tips to harness the financial industry to do something really amazing and help build advanced energy communities, smart mobility solutions, a circular economy, reduce food waste, and restore nature’s services? What does it take to unleash the portion of the financial sector that is not predatory, but rather that has a conscience and the will to do good, to help us cannibalize the non-renewable, linear, non-sustainable economy while at the same time building a sustainable future?
I’ll be interested in your thoughts.
Justine

#2

Hi there,
This is a great post. I totally agree money needs to be diverted into sustainable initiatives on a mass scale to effect real change, and banks should play a pivotal role in this as servants of the people, not profiteers The sorry thing is that most people live their lives according to the immediate environment around them, which in current times means products, consumption, more products, more consumption to the point where capitalism has lost control. There is no distinction between ‘good’ and ‘bad’ capitalism, and because sustainable processes (= good) are more difficult to achieve they lose out every time to bad. We have to change the environment and behaviours of people for improvement. One possible option is increased amounts of divestment away from fossil fuel using companies as you suggest, and loans / subsisdies into green initiatives. But I cannot see how this would reach a tipping point.
Another is to the change the concept of money itself (after all, a human creation) so it is indexed against the net good/harm it achieves. I refer you to the post and image I put onto the site yesterday to get discussion going.

#3

HI everyone in this post,
Here’s another perspective on the fin industry:

                              The financial sector probably play's a big role in this transformation process 

because as Kate mentions in her video’s its comes back to the original meaning of investing -
financial markets I guess could be considered and investment market and the investing is about contributing something or resource toward creating a future event or outcome ( return or value ) or maybe wellbeing if you buy a pool or a massage chair or a CO2 extractor fan for the planet to make things more personal / planetary and practical .

So clearly finance probably has a pivotal role in this paradigm shift because potentially just a small shift from the investment markets or asset managers that direct investments might logically have a massive pivotal shift on the future outcomes to our planet - environment and our " common good " . Needless to say to date this industry probably has not been at the top of the ethical hierachy but is that just because it’s performance criteria’s were distorted and if we provide the parameters for performance which take into account the "whole doughnut " then it could learn to adapt and come up with radically different answers of where to invest ? Probably -
What might those new performance parameters be ?

THRIVEliness ?
CommonGOOD,
commonvalue,
generalwellbeing,
the value of everything,
Gaiakindness .

Actually it seems there is already a shift happening - just look at the levels of sustainable investment that has happened in the past 4-5 years and the commitment by states to solar energy as well as some predictions that I have seen that Green Energy will become and is becoming one of the fastest growing asset classes for the asset management industry with hundreds of billions of years now being invested and financed predominantly in solar.
here is a link to a pdf doc titled " Global trands in renewable energy investment 2018 " the numbers are astounding and showing that solar is cheap enough now for large scale adaption it seems:

https://europa.eu/capacity4dev/file/71900/download?token=57xpTJ4W

The are already hundreds of billions going into sustainable energy but this investment growth has slowed
in the past two years it seems so we can still conclude that momentum needs to accelerate to create more impact and given that the backbone of a new economy will be cheap and clean energy then investment rates need to kick into a new gear.

Yes finance could really play a major pivotal role in any shift and the fact that it’s at the core of the current paradigm so it could be the tipping point toward the doughnut - well-being natural balance new economy.
Fintech is a very trendy term right now so maybe a sub-sector of fintech could be " sustainable fintech" ?

At the end of the day the consumer can also decide with their feet and shift - but I guess they can’t shift if someone doesn’t provide the alternative ? My guess is that this threat could provide a discussion on alternatives which could be very exciting .

thriveliness to us all
that’s my thoughts for today !