Cogent Economics & Finance

Sustainable Finance and Crisis: Resilience, Vulnerabilities, and the Path Forward

The relationship between sustainable finance and crisis is one of paradox, tension, and profound complexity that resists simple narratives and demands rigorous, multidisciplinary investigation. On the one hand, crises destroy: the 2008 Global Financial Crisis and the COVID‑19 pandemic exposed the catastrophic failures of conventional, short‑term, shareholder‑centric finance - a model driven by profit maximization, the externalization of social and environmental costs, and the systematic ignorance of systemic risk. On the other hand, crises create: they open intellectual and political space for alternatives. Sustainable finance (i.e., the integration of environmental, social, and governance (ESG) criteria into financial decision‑making, capital allocation, and risk management) has emerged as a viable alternative to that fragile, short‑termist paradigm. It seeks to internalize externalities, price systemic risk (including climate change), and align financial flows with long‑term societal well‑being. Yet this relationship is not straightforward; sustainable finance itself can generate new vulnerabilities, making rigorous inquiry essential.

Under pressure from successive crises, sustainable finance has catalyzed the creation of new institutions (e.g., the Network for Greening the Financial System, the International Sustainability Standards Board), new instruments (e.g., green bonds, sustainability‑linked loans, debt‑for‑nature swaps), and new actors (e.g., ESG rating agencies, impact investment firms, climate‑focused activist shareholders). However, the global economy now faces overlapping shocks, such as geopolitical conflict, inflation, and accelerating climate impacts, that test the resilience of these innovations in real time. The anti‑ESG political backlash, particularly in the United States, introduces new political risk. For developing economies, the gap between sustainable development financing needs and actual capital mobilization represents a structural crisis. Understanding when, how, and under what conditions sustainable finance genuinely buffers against crises or inadvertently creates new fragilities, such as greenwashing, concentration risk, or valuation bubbles, is therefore of urgent practical and scholarly importance.

The global economy is navigating an exceptionally complex and volatile environment, characterized by the legacy of COVID-19, the geopolitical consequences of the war in Ukraine, the fragmentation of global supply chains, elevated inflation and interest rates, and the accelerating physical manifestations of climate change. In this environment, the resilience - or vulnerability - of sustainable finance to multiple, overlapping, and interacting crises is being tested in real time, generating an extraordinary natural experiment for researchers. Simultaneously, sustainable finance is experiencing a period of intense self-examination and contestation. Questions about the integrity, effectiveness, and inclusiveness of sustainable finance are now being asked loudly and publicly by regulators, politicians, civil society organizations, and financial practitioners. This moment of scrutiny presents both a need and an opportunity for rigorous, independent academic research to provide evidence and analytical clarity that can help guide the debate constructively.

The nexus of sustainable finance and global crises is a pivotal and multidisciplinary challenge for modern financial scholarship. We examine the “paradox of crisis,” where systemic failures, from the 2008 collapse to the COVID-19 pandemic, foster innovation within institutions but also challenge the resilience of sustainable frameworks. We call for contributions considering subtopics such as:

• The empirical performance of ESG portfolios under market stress
• The emergence of new vulnerabilities, especially greenwashing and political backlash
• The structural financing gap that limits climate action in the Global South
• Climate-related systemic risk and the nexus between sovereign debt and climate vulnerability

Original research articles, replication studies, review articles, letters, and data notes are welcome. The submissions must contain rigorous analytical clarity informing policy design in this era of intense global volatility.

Please contact Dr. MK Huffman at [email protected] with any queries about discount codes regarding this Article Collection.

Please also be sure to select the appropriate Article Collection from the drop-down menu in the submission system, and select the section "Environmental Economics and Sustainability."

Dr. Ibrahim Fatnassi is an Associate Professor of Finance and Accounting at the University of Jeddah, Saudi Arabia, holding a Ph.D. in Finance from the Institut Supérieur de Gestion de Tunis. With over 15 years of academic experience, he specializes in Islamic Finance, Financial Risk Management, and Quantitative Finance. He currently serves as Quality and Accreditation Coordinator at the University of Jeddah, overseeing NCAAA accreditation processes within his department. He holds several professional certifications, including the CPSS (AAOIFI) and multiple CIBAFI designations, and is a CFA Level I candidate. Dr. Fatnassi has published extensively in ISI-indexed journals such as Economic Modelling, Finance Research Letters, and Applied Economics Letters. He has taught across Tunisia and Saudi Arabia, supervised Master's and Ph.D. students, and has held key academic leadership roles, including Deputy Head of the Finance and Accounting Department and Chair of the Master of Science in Finance program.

Dr. Nadia Mansour is an Associate Professor and Researcher at the University of Salamanca, Spain, specializing in sustainable finance and financial innovation. She holds a PhD in Management Sciences from the University of Sousse, with a dissertation on banking regulation, efficiency, and financial stability in MENA countries. A senior expert for the UNDP and a lead trainer for international organizations like UNESCO and Erasmus, she bridges the gap between high-level policy and academic rigor. Her research focuses on sustainable finance, FinTech, banking regulation, and financial innovation. Dr. Mansour serves as Editor-in-Chief of the International Journal of Cyber Behavior, Psychology and Learning and Associate Editor for the Journal of Sustainable Finance and Investment. Dr. Mansour has published extensively in high-impact journals, including the Journal of Sustainable Finance & Investment (Taylor & Francis), Competitiveness Review (Emerald), and the International Journal of Financial Studies (MDPI). Dr. Mansour has been recognized with multiple best paper awards. She has edited several volumes with Springer and IGI Global.

Dr. Fatnassi and Dr. Mansour declare no conflicts of interest regarding this work.