Blueprint 6: Sustainable Finance

Purpose of the Blueprint
Aspect | Explanation |
Introduction | This Blueprint seeks to define Sustainable Finance, and identify best practices for achieving this goal. Simply speaking, financial sustainability results from the creation of positive current and future value; more holistically, achieving sustainability through finance entails aggregate positive (or “regenerative”) impacts on social and ecological systems, many of which are currently on degenerative trajectories toward collapse. Current “state of the art” ESG Integration (which assesses environmental, social and governance factors across all asset classes and investment strategies) moves in the right direction, but by definition falls short. “ESG does not, by nature, carry a true sustainability gene,” says Global Reporting Initiative Co-Founder Allen White, due to its focus on incremental progress. “Incrementalism alone, at the end of the day, is insufficient. Sustainability requires contextualization within thresholds. That’s what sustainability is all about.” So, Sustainable Finance requires a systems-level approach that assesses sustainability thresholds (or the carrying capacities of the capitals) to create what’s called “system value” across financial, social and ecological systems in order to transcend the “predatory delay” of incrementalism. |
Focus | This Blueprint sets out to identify existing mechanisms and trends, as well as recommending necessary developments and innovations, to transform finance into a regenerative model. It will focus on transcending existing shortcomings in the financial realm (systemic short-termism), as well as shortcomings in the social and environmental realms (endemic incrementalism.) The goal is to identify the “sweet spot” where long-term (“durable”) financial value creation converges with regeneration of social and ecological systems (“system value”). The Blueprint will cover all three primary areas of finance: equity, debt (fixed income), and insurance. |
Link to other r3.0 Blueprints |
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Areas the Blueprint will cover
Aspect | Explanation |
Thresholds & Allocations | Sustainable finance and investing requires systemic support for economic, social and ecological thresholds, allocated to the portfolio level. This was labelled “threshold investing” as early as 2013. |
Fiduciary Duty -> Strategic Duty | Current interpretations of fiduciary duty obsess on short-term shareholder value creation (profit maximization); a proper interpretation (enforceable through redefined case law) calls for a “strategic duty” to ensure long-term system value creation. |
Monocapitalism -> Multicapitalism | Current decision-making in finance predominates on a single capital – financial; sustainable finance bases its decisions on the multiple capitals – particularly respecting their carrying capacities. |
Systemic Risk & Existential Risk | Traditional finance assesses portfolio risk; sustainable finance assesses systemic risk and even existential risk, including the risks of predatory delay. |
Forceful Stewardship & Beta Activism | Transforming finance to achieve sustainability requires fiduciaries to shift from what’s called “tea & biscuits” or “tummy tickling” engagement to “Forceful Stewardship” pressing for transformative change of the business models of portfolio holdings. Similarly, “Beta Activism” acknowledges that systemic risks / dynamics at the beta level now transcend enterprise- or even portfolio-level risks / dynamics at the alpha level, prompting forward-looking investors to engage on systemic issues. |
Scenario Analysis -> Transformation Planning | Building on Recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) to conduct climate scenario analyses, investors should take the next step of using their influence to encourage portfolio companies to produce transformation plans to new business models that create future value in the context of the SDGs and the Paris Climate Accord. |
Resources the Blueprint will build upon
Resource | Explanation |
UNEP Inquiry | This is the most comprehensive research in the field, which this Blueprint will build upon in order to advance the implementation of Recommendations. |
Global Initiative for Sustainability Ratings (GISR) | GISR folded, opening up its assets for inheritance by other initiatives. The r3.0 Sustainable Finance Blueprint has secured permission to inherit the GISR Principles. |
Expected outcomes of the Blueprint
Outcome | Detail |
Repository | Blueprints typically result in a repository of source materials numbering in the hundreds, compiled into a repository. |
Infographics from virtual dialogue | Blueprint development typically involves a virtual dialogue on Convetit for each Exposure Draft, resulting in infographic reports. |
Public comment | After vetting two Exposure Drafts with the Working Group of 20-40 global experts, a Public Comment period precedes final publication. |
Blueprint #6 | The final version of Blueprint #6 will be published as a r3.0 Blueprint Report. |
Parties who should be involved
Main role – (S)=sponsors; (W)=work/research partners; (D)= Data providers; (V)=validating / networking partners | |
Sponsors (S) | Finance-oriented foundations, governments, multilaterals; finance firms |
Research partners (R) | Research universities and think tanks; individual experts |
Work partners (W) | Advocation Partners and Transformation Journey Program Participants |
Data providers (D) | ESG Data Providers |
Validating / networking partners (V) | r3.0 involves influential players that aren’t in a position to contribute formally in this Blueprint Project to reflect and add opinions where deemed necessary. This increases the visibility of the project and recognition of the outcome |
Management of the Blueprint project
Function | Role Description |
Program manager | Ralph Thurm |
BP Lead(s) | Bill Baue |
Corporate Participants | 7-10 |
Network Representatives | 7-10 |
Non-Profit Representatives | 7-10 |
Timeline
Month | Activities |
1 | Call for participation, set up of working group, budget check, official launch |
2-3 | Literature collection, analysis, 1:1 expert interviews |
4 | Structuring of outcomes, 1st meeting working group |
5-6 | Development of first draft blueprint with participants |
7 | Online Think Tank, infographic development |
8 | Structuring of outcomes, 2nd meeting working group |
9-10 | Final draft to working group, public comment period |
Resources
Contributions | Description |
Funding | 200k EUR, accepting donations as matching funding, and corporate contributions between 10k and 20k EUR |
In-kind | possible |
Sustainable Finance Blueprint Repository
Lead Author
Bill Baue
Senior Director
r3.0
+1 413 387 58 24
Ralph Thurm
Managing Director
OnCommons / r3.0
+31 64 600 14 52
Working Group Members

Keith Ambachtsheer
Founder, KPA Advisory Services

Trae Ashlie-Garen
Executive Coach, Animis Philanthropic Ventures Inc. and the WINfinity Framework

Salomon Billeter
Founder, sim2sustain

Joe Brewer
Director, Center for Applied Cultural Evolution

Jane Fiona Cumming
Co-Founder & Director, Article 13

Jed Davis
Director of Sustainability, Cabot Creamery Cooperative

Frank Dixon
Founder, Global System Change

Catharina B. Dyvik
Program Manager, Blended Finance Taskforce / SYSTEMIQ

Gil Friend
CEO, Natural Logic Founder Critical Path Capital

John Fullerton
Founder, Capital Institute

Adam Garfunkel
Managing Director, Junxion

Radoslav Georgiev
ESG Disclosure Lead, ING

Sven Griemert
Owner, Griemert Consult

Jessie Henshaw
Founder, HDS

Silke Hohmuth
Founder, MenschBank e.V.

Paul F.M. Hurks
RA Director International Affairs, NBA

Astrid Kaag
Policy Advisor, Province of Noord-Brabant (NL)

Christoph Klein
Managing Partner, ESG Portfolio Management GmbH

Jan Köpper
Head of Impact Transparency & Sustainability, GLS Bank

Taeun Kwon
Head of Wealth Management Programs, Center for Sustainable Finance and Private Wealth (CSP), University of Zurich

Natasha Lamb
Managing Partner, Arjuna Capital

Laurie Lane-Zucker
Founder & CEO, Impact Entrepreneur, LLC

Sanford Lewis
Director, Shareholder Rights Group

Steve Lydenberg
Partner, Strategic Vision Domini Impact investment & CEO ,The Investment Integration Project

Tim MacDonald
Producer/Publisher, Evergreencore

Magdalena Matei
Founder, The Urban Tree Village

Herman Mulder
Chairman SDG Charter Foundation (Netherlands); Co-Founder/Chair True Price Foundation

Jeremy Nicholls
Professor Social Value, Staffordshire University

Prof. Dirk Schoenmaker
Academic Director, Erasmus Platform for Sustainable Value Creation

Jérôme Tagger
Chief Executive Officer, Preventable Surprises

Raj Thamotheram
Founder & Chair, Preventable Surprises

Will Szal
Head of Economics, President of the Board, Regen Network

Mark van Clieaf
Managing Partner, Organizational Capital Partners

Rens van Tilburg
Director, Sustainable Finance Lab

Dr. Koos Wagensveld RA
Professor Financial Control, HAN (Hoogeschool Arnhem Nijmegen)

Volker Weber
Chairman of the Board, “Forum Nachhaltige Geldanlagen e.V”

Cynthia Williams
Osler Chair in Business Law, Osgoode Hall Law School, York University (Toronto, Canada)

Allen White
Vice President & Senior Fellow, Tellus Institute Co-Founder, Global Reporting Initiative

Alan Willis
President, Alan Willis & Associates