Cultivating a Sustainable Mindset in Finance: Mobilising the Capital Needed to Combat Climate Change

Cultivating a sustainable mindset in finance looks at the important role that the financial sector could play in closing the climate financing gap. The financial sector's allocation of capital to climate financing remains extremely low as a proportion of the trillions of investment dollars available. A raft of explanations are often put forward that describe the external barriers to investment, including lack of information and standardised definitions, inconsistent government policies, liquidity contraints, pricing and deal sourcing. In comparison, the internal barriers to investment are often overlooked, such as not connecting investment beliefs with a broader sense of purpose, feeling uncomforable with complexity, conforming to peer group norms, failure to reflect on personal agency, fragmented organisational culture, tension between short and long-term goals, and a fear of failure. To help redress and further unpack some of these internal barriers, a Sustainability Mindset framework is applied to the finance sector. It suggests that a modest shift in investors' mindsets could help to accelerate the financial flow into climate financing, with some practical suggestions provided to help achieve that shift.