Chapter 1: Green central banking

This chapter focuses on the importance of central banks embracing a climate mandate and using their role as financial regulators to identify and constrain climate-related financial risk. The chapter also explores concepts such as climate risk supervision, stress tests, and green quantitative easing, which could help finance investments in green energy. The report argues that this approach could contribute to building a financial system that would be part of the solution to climate chaos, rather than part of the problem.

Chapter 2: New rules for private banks

The second chapter covers the need for mandatory environmental, social, and governance (ESG) rules for firms listed on financial markets. The report calls for issues like climate-related financial disclosure, capital requirements, green credit guidance, credit ceilings, and lender liability to be made mandatory so that companies take responsibility for their climate impact. It argues that continuing divestment campaigns have already undermined fossil fuel companies’ public acceptability.

Chapter 3: Public banks and banking alternatives

Chapter three suggests that public banks and alternative banking systems can provide funding to various environmental sectors. It highlights a range of banking alternatives such as national development banks in the Global South, green development banks, cooperatives and local savings banks, and ethical banking. The report argues that these financial vehicles should act as intermediaries in the transition to a sustainable financial system.

Chapter 4: Reforming financial markets

The fourth chapter highlights the fact that financial markets are currently governed by short-term profit motives and don’t require companies to take responsibility for their climate impact. The report suggests that there be mandatory ESG rules for firms listed on financial markets. The report recommends three key steps to address the problem:

• Focus divestment campaigning on getting insurance companies out of the coal sector. The report argues that continuing divestment campaigning has already helped to undermine fossil fuel companies’ public acceptability.
• Make it mandatory for investors and companies to make climate-related financial disclosures.
• Companies that voluntarily disclose their carbon footprint are not required to take any action on this basis. Thus, companies should limit their exposure to fossil fuel and other high-carbon investments.

Chapter 5: Leadership from investors, regulators and governments

This chapter suggests that regulators must unite to foster a new and sustainable economy. The report calls for a harmonization of regulatory approaches and a shared global understanding of the challenges faced. The report advocates for investors and asset managers to develop standardised methods of assessing long-term risk.

Chapter 6: Finance for the future, not the past

The final chapter of the report summarises its recommendations for a financial system that better supports environmental sustainability and social justice. The report argues that uprooting the monoculture of financial capitalism and replacing it with a balanced financial ecosystem requires far more than uprooting a single tree. The report emphasizes the importance of a democratic and fossil-free world.