Recommended citation: Naidoo, C., 2019. Transitioning South Africa’s financial system towards sustainability. Chapter 6 in Sustainability Transitions in South Africa edited by Mahomed, N., (2019). Taylor and Francis. London.
William Shakespeare (1602) wrote, that “if money goes before, all paths do lie open”, which in the context of sustainability transitions means that financial flows are required for new development pathways to be realised. Policymakers have historically overlooked this strategic role, but this is now changing. This chapter describes the context of change within global financial systems, and offers a historical background to South Africa’s financial system, identifying that financial inclusion remains a significant challenge to its sustainability transition. Three case studies are presented (i) the Green Fund, a dedicated environmental finance mechanism set up by the government; (ii) the South African National Biodiversity Institute, a financial intermediary for international environmental assistance, and (iii) gender-focused financial services and products. The chapter asserts that, while South Africa’s financial system has strong foundations and features to advance sustainability transitions, current efforts need to be scaled. It suggests that the extent to which the South African financial system, including its public finances, is fit for purpose to support sustainability transitions will determine the depth, scale and pace of the transition.
