Key Impact Points:
- Capital markets, if redesigned with transparency and incentive alignment, can accelerate global sustainability more effectively than regulation alone.
- New types of sustainable securities—beyond green bonds and ETFs—are needed to democratize access for retail investors and accelerate corporate accountability.
- Industry-wide collaboration in finance, similar to SWIFT and DTCC, could model how capitalism drives systemic climate progress.
Business Thinking Must Lead the Sustainability Shift
In his recent thought piece, Alex Kontoleon, Chief Strategy Officer of Green Impact Exchange, argues that “it is time to stop putting sustainability thinking into business—and start putting business thinking into sustainability.” Despite decades of global climate conferences and pledges, carbon emissions remain at record highs, global temperatures continue rising, and biodiversity is rapidly declining.
Public concern is not the issue. UNDP data shows 56% of people globally think about climate volatility weekly, while a 2023 Pew study found that 72% of Americans care “a great deal” or “some” about climate change. Yet, corporate sustainability efforts still lack scale, urgency, and mass investor access.
Why Cosmetic Change Isn’t Enough
Kontoleon criticizes the incrementalism and marketing spin around long-term net-zero pledges. “Net-Zero by 2050 can feel like ‘kicking the can down the road,’” he notes, warning that fear-based messaging and vague commitments erode public trust—especially among retail investors and younger generations who increasingly view capitalism with skepticism.
Instead, excitement and transparency must be the new fuel for sustainability. “Excitement fosters a deeper, stronger drive to embrace change,” he writes, referencing research on how positive emotions shape long-term climate behavior.
Capitalism’s Missed Potential—and Opportunity
Rather than dismissing capitalism, Kontoleon says it should be retooled to serve long-term environmental goals. He highlights how market incentives—if structured correctly—can accelerate climate innovation and corporate responsibility.
“When profit and planet converge, businesses have strong incentives to reduce waste, lower emissions, and adopt sustainability initiatives to increase the bottom line.”
He calls for aligning investor, consumer, and executive incentives, allowing sustainability to be both profitable and pragmatic. Retail investors, he argues, should be given more accessible options—new sustainability-linked financial instruments that go beyond traditional green bonds or ESG ETFs.
Historical Precedents for Market-Driven Solutions
Kontoleon illustrates how cooperative capitalism can solve systemic problems, citing the creation of:
- SWIFT (1973) – for secure international financial transactions
- DTCC (1973) – to digitize and stabilize securities clearing
- ISDA (1985) – to manage credit risk through standardized derivatives
These collaborations—once seen as improbable on Wall Street—demonstrate how industry-wide infrastructure can be built when self-interest aligns with systemic stability.
“Collaboration is not a bad word, nor is it inherently socialist. Capitalism is not a bad word, nor does it necessitate unfair, poor outcomes.”
Related Article: SEC Approves Green Impact Exchange, Paving the Way for Sustainable Investing
Capitalism with a Hobbesian Lens
Kontoleon closes with a call to move from Kantian idealism to Hobbesian realism:
“We need to provide economic incentives for sustainability to appeal to people’s Hobbesian self-interest.”
Only by aligning human nature with financial gain can sustainability scale. Capitalism, responsibly stewarded, could become the strongest force in advancing climate resilience and shared prosperity.
Author Note:
Alex Kontoleon is CSO at Green Impact Exchange (GIX) and formerly held senior roles at State Street. He holds a Master’s from Columbia University and is a leader in sustainable financial innovation.
