The Role of Sustainable Finance in the Transition to the Post-Growth Economy

Abstract

In light of the urgent ecological and social challenges facing our world, there has been a noticeable shift in focus towards exploring economic models that prioritise ecological constraints and societal well-being over the pursuit of continuous growth and profit maximisation. These alternative perspectives collectively fall under the overarching term of post-growth economic models and the financial sector has significant influence over the real economy, and the investments made within it can either perpetuate destructive traditional practices or contribute to the construction of sustainable, regenerative, and inclusive economic and social structures. Therefore, this chapter aims to delve into the role of existing sustainable investment strategies, such as ESG (Environmental, Social, and Governance) Investment and Impact Investment, in the transition to a post-growth era. It also aims to examine the new transformative investment frameworks that have emerged in response to the shortcomings of current investment models in facilitating this transition.