Chapter 7

From systemic risks to system opportunities

The changing planetary reality and our inability to properly grasp its consequences for people and planet pose immense challenges and risks. Yet, a shift towards a prosperous future for all on a thriving planet is possible. Domino-effects that support opportunities for both people and the planet can be triggered in many ways: changing social norms, supporting economic policies and institutions, the “power of giants”, initiatives to phase out malfunctioning systems and accelerated investor action for biosphere stewardship and equity.

The world has entered a time of unusual turbulence with severe planetary, social and economic consequences. Humanity and societies have truly become a global force of planetary change. Economic decisions by businesses, financial institutions, central banks, governments and many others have climatic and ecological impacts that impact society and economies, threatening livelihoods, food security, and the resilience of vital ecosystems.

Shifting from systemic risks to system opportunities requires a new perspective, as well as new collective strategies and actions. Now is the time to move away from theories, world views, and beliefs systems that are blind to planetary change, or that treat the planet and our living biosphere as something external to economic and social development.

People and planet are deeply intertwined and interconnected from the local to the global level. This new reality requires actions that build transformative capacities.

These capacities can be built through four avenues:

  1. Defining a new direction;
  2. Creating enabling conditions that facilitate change;
  3. Developing capacities for phasing out: and
  4. Helping scale up investments for resilience.

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1. Defining a new direction

A safe and just future is possible. Ample examples of positive initiatives exist – visions for halted climate change, reversed biodiversity loss, a safe and just ocean economy and a transformed food system. The financial sector can, and should, align with such visions and opportunities.

2. Creating enabling conditions

Existing institutions, political interests and economic incentives can all hinder the emergence of sustainable alternatives. Therefore, creating conditions that enable transformations is important.

Three key actions contribute to creating such conditions:

  • Tap into norms and values that support the change towards sustainability, using policies to guide the formation of new norms and behaviours.
  • Create institutional and economic incentives for transformation – existing policy instruments can help accelerate transformations, but these policies require careful consideration during and after a transformation.
  • Dare to move without consensus. Change often causes disagreements about ends and means, resulting in impasse and halting the process. To help accelerate transformation, identify co-benefits and find innovative ways to collaborate across ideological differences.

3. Phasing out

Transformative change is as much about letting go as it is about innovation. Older defective structures that reproduce inequities and unsustainability should be phased out wherever possible. Policy-makers, financial institutions and others can support the destabilisation and phaseout of unsustainable systems, and can ensure that people are not left behind during such a change. 

A sustainability transformation requires the active phaseout of the following:

4. Accelerated investor action for resilience

Phasing out must be matched by growing investments in biosphere-based sustainability.  Increased investments for resilience should directed towards activities that help both people, ecosystems and the biosphere as a whole to cope with the changing planetary reality. Recent assessments show that yearly total investments need to increase by 10–29 times in sectors like agriculture, forestry, and other land use by 2030 to achieve the climate goals of the Paris Agreement.

Accelerated investments in resilience also need to 1) integrate biosphere stewardship with equity, 2) act in ways that enable people to be part of the transformation, and 3) help change restrictive structures.

Act with urgency and speed

Our planet has changed profoundly in the last 50 years. Today the prospects for a just and safe future for all look bleaker in many ways. But the science, innovation and action-based experience developed through efforts to tackle these challenges, have improved in astounding ways as well. 

The science is overwhelmingly clear: we must act with urgency and speed to secure a safe and just future for all on a thriving planet. This is both our opportunity, and our responsibility.