Fixing the financial system in the wake of its implosion in 2008 required rapid, dramatic, unconventional actions underpinned by unprecedented international coordination. At the helm of this massive effort were some of the world`s most conservative institutions, central banks, financial regulators and ministries of finance. Whilst applauding such an exceptional response, John Lipsky, the IMF`s former first deputy managing director has pointed out that the financial market reform agenda is an “unfinished business” even by conventional measures, and that we have hardly begun when one takes into account the changes needed to secure adequate financing to deliver the needed transition to sustainable development.

Two years ago, the United Nations Environment Program decided to work out what it would take to effectively align the financial system – no holds barred – with sustainable development. It commissioned an inquiry, guided by an extraordinary Advisory Council including Rick Samans from the World Economic Forum, Atiur Rahman, Bangladesh`s central bank governor, Naina Kidwe, chair of HSBC India, Murilo Portugal, president of the Brazilian Bankers Association and, yes, John Lipsky, just to name a few.

The timing seemed perfect – the worst horrors of the financial crisis had passed, so there was more bandwidth to looking forward. Furthermore, the sustainable development goals and climate negotiations provided a critical international context for action, with clear evidence of a massive financing gap, estimated at $2.5 trillion annually just for developing countries. Most of all, it had become clear that fresh thinking and action was needed – as Bank of England Governor Mark Carney highlighted in his recent climate speech, when he reminded his audience that financing the transition could never be a niche activity, and so had to go beyond even the smartest, highly leveraged public finance in effecting a massive shift in resource allocation.

On 8 October, at the IMF/World Bank Annual Meetings in Lima, the inquiry delivered its global report. Based on 15 country studies and a total of 60 commissioned pieces of work, hundreds of events and thousands of conversations, the report will set out its core findings. The news is good, perhaps unexpectedly so. Discovered by the inquiry is a “quiet revolution”, not as high profile as saving us from the effects of the global financial crisis, but potentially more important. Growing numbers of central bankers and other guardians of global financial and capital markets have begun the task of incorporating social and environmental considerations into the design and practice of financial decision-making. Some of these champions are the same as those who have led in addressing the financial crisis. The Bank of England is a case in point with its focus on the impact of climate on financial stability, and the People’s Bank of China, whose quantitative easing has maintained China as a global growth engine during turbulent times is another exemplary case in their leadership of China’s Green Finance Task Force and subsequent steps already taken to implement its findings.

Many others, however, played a modest role in handling the short-term crisis, but are active in addressing arguably more fundamental imbalances. Kenya’s central bank, working with the Kenyan Bankers Association, has taken steps to ramp up financial inclusion, Brazil’s central bank has, again with strong support from the country`s bankers association, advanced regulations to ensure more effective risk management. The Johannesburg Stock Exchange has led the way with Brazil’s BOVESPA in requiring sustainable development to be integrated into listing requirements, just as China is about to issue the first government sponsored green bond guidelines.

Action in the wake of the financial crisis illustrates that international community can act decisively and at scale in ensuring that the financial system can be part of the solution, not the problem. Such ambition is needed once more, to ensure that the heartland of the global economy, the financial system, can evolve to serve its core purpose of financing the real economy. UNEP’s report opens a new chapter in setting out how such an evolution can in practice be achieved.

Author: Simon Zadek is the co-Director of UNEP`s Inquiry into Design Options for a Sustainable Financial System. You can follow him on Twitter at @SimonZadek. The Inquiry`s global report, along with many underlying working papers, will be downloadable via this link after its release on the 8 October.

Image: Passersby are reflected on a stock quotation board at a brokerage in Tokyo, Japan, September 29, 2015. REUTERS/Issei Kato