Climate change is not solely an environmental challenge. It is an economic, financial and governance challenge that threatens the long-term stability of markets, societies and states.

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This is not just unjust, it’s existential.

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If we do not update our current financial system, we face systemic risks to global financial stability and economic prosperity, and therefore civilisation as we have come to understand it. Yet the financial markets are investing in their own destruction rather than solutions that would benefit us all.

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Systemic problems require systemic solutions.

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Financial markets incentivise short-term profits over long term damages; there is no effective mechanism to account for physical planetary limits. Existing mechanisms are not enough for businesses to invest in the transition to a clean economy amidst geopolitical turmoil.

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No single institution, no single government, and no single regulatory body can solve this alone.

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Correcting the market failure at the heart of the climate crisis demands coordinated action across every level at which financial and economic decisions are made. The transition will need to be governed; the only question is whether that governance is coherent and intentional, fragmented and reactive, or missing entirely.

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The case for Transition Governance.

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Transition Governance is the intentional construction of coherence: aligning the rules, incentives, and expectations that shape investment decisions from the boardroom to the trading floor to the treasury ministry, so that capital flows deliver the transition we collectively committed to in 2015.

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History will not remember the frameworks that were built in isolation. What will be remembered is the moment when they were finally connected. The agenda set out in our latest paper is our contribution to that effort.

 

More than that, it is an open invitation to the institutions, policymakers, and investors who share the conviction that the window is open, that we have the opportunity to steer this transition together, and a reminder that this window will not remain open indefinitely.