Sustainable Finance: What Has Happened—What Needs to Happen?

The chapter begins with an anecdote from 1965 to illustrate the tension between specialist knowledge and broader societal values. It then delves into the evolution of sustainable finance, noting the mainstreaming of ethical investments and the development of sustainability assessments like the Frankfurt-Hohenheim Guidelines. Despite progress, the author critiques the current ESG investment industry for not going far enough. The chapter argues for legal regulations to limit corporate egoism and mandate contributions to the ecological, social, and cultural common good. It highlights Japan's Top Runner Approach as a successful model for achieving sustainability through regulatory pressure and consumer transparency. The author concludes by emphasizing the urgency of a holistic sustainability transformation and the crucial role of the ECB and governmental policies in this endeavor.