Challenges and opportunities to scale up sustainable finance after the
COVID-19 crisis: lessons and promising innovations from science and
practice
Abstract
Over the past few years, the international community adopted important
policy frameworks to foster an inclusive green economy that acknowledges
the value of ecosystem services, protects natural resources and promotes
a sustainable future. Without finance in the tune of trillions of
dollars annually, all these objectives and commitments will remain on
paper. As the COVID-19 pandemic deflected the attention of governments
away from long-term sustainability objectives and imposed unparalleled
injections of public capital to rescue national economies, the survival
of global environmental and socio-economic sustainability priorities
becomes more than ever dependent on the private sector. This requires a
progressive rather than defensive financial system. One that
reinvigorates the sustainability momentum established by the Sustainable
Development Goals (SDG), by supporting the best examples of responsible
behaviour, circularity, and solidarity that emerged during the health
crisis. In turn, this demands a profound rethinking of sustainable
finance instruments, practices, metrics and tools in use prior to the
crisis, which were clearly failing in their ability to mobilize
sufficient public and private capital to accomplish the sustainability
transition and convince stakeholders of results achieved. This article
provides a review of some of these decision-support tools, focussing in
particular on instruments of non-financial disclosure. Its main
objective is to highlight key issues and gaps in sustainability
assessment practice, which help explain the sustainable finance
challenges and failures observed prior to the COVID-19 crisis, while
pinpointing some promising examples of novel approaches that could
enable a system update & reboot and revive sustainable development
ambitions