Normalizing Sustainability Finance

The document argues that the current structure of global and national financial systems hinders the transition to sustainability, highlighting a significant funding gap for the 2030 Sustainable Development Goals (SDGs) and the dominance of perceived profitability over sustainability standards in financial flows.

• The global financial system is characterized by a high concentration of wealth, with approximately USD 400 trillion in gross liquid assets, 64% of which is held by individuals, primarily those in middle- and upper-income countries. This structure, along with income and wealth inequality, acts as a critical barrier to a sustainability transition.
• There is a substantial funding shortfall for achieving the 2030 Sustainable Development Goals (SDGs) in developing countries, estimated between USD 8.4 trillion and 10.1 trillion. While private financial flows—driven by potential returns and ESG or net zero standards—cover about a quarter of this gap, primarily for sustainable energy, the primary driver of financial flows remains perceived profitability.
• While government liquid assets can counteract market pressures, their ability to influence private financial flows is limited by the needs of security and administration. However, sovereign wealth funds are identified as entities with the potential to promote sustainable development, and the government response to the Covid-19 pandemic demonstrated significant fiscal potential.

APA

Stockholm Environment Institute (2022). Normalizing Sustainability Finance. https://www.sei.org/publications/normalizing-sustainability-finance/

Chicago

Stockholm Environment Institute. Normalizing Sustainability Finance. 2022. https://www.sei.org/publications/normalizing-sustainability-finance/.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Normalizing Sustainability Finance |date=18 May 2022 |url=https://www.sei.org/publications/normalizing-sustainability-finance/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2022normalizing, author = {{Stockholm Environment Institute}}, title = {{Normalizing Sustainability Finance}}, institution = {Stockholm Environment Institute}, year = {2022}, month = may, url = {https://www.sei.org/publications/normalizing-sustainability-finance/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }