This chapter analyses the Federal Reserve’s mandate and statutory objectives and how they have evolved since the Fed was established in 1913, and considers the mandate in the context of environmental and social sustainability challenges. The chapter argues that the Fed’s mandate and statutory objectives historically were interpreted broadly to allow discretion for the Fed and its Federal Open Market Committee (FOMC) to manage monetary policy in support of Government policy. The chapter further argues that the legislative history behind the adoption of the dual mandate to achieve price stability and full employment allows the FOMC and the Board of Governors discretion to use their powers to mitigate the risks emanating from the broader economy and society that might impact the price stability and full employment objectives. Despite the conventional interpretation by Fed officials that the Fed ‘should stick to its knitting’ by focusing on short-to-medium term risks to price stability, the chapter concludes that the economic evidence is compelling that climate finance risks and other sustainability challenges can undermine price stability and full employment and therefore should be factored into the Fed’s monetary policy and financial stability strategy.

Chapter 7 examines whether the American Dream – centered on freedom, equality of opportunity, and upward mobility – might be better realized in Nordic societies than in the US. Through Isaiah Berlin’s framework of negative freedom (freedom from something) and positive freedom (freedom to something), it analyzes how different varieties of capitalism translate shared aspirations into distinct realities. While American society prioritizes negative freedoms like freedom from taxation and regulation – often benefiting those with power – Nordic societies focus on expanding positive freedoms, such as universal access to healthcare and education. The chapter documents Nordic nations’ superior performance on measures of social mobility and equal opportunity, while exploring how their universal systems function as “efficient hand pumps” expanding positive freedoms. Using public universities as a case study, it demonstrates how American institutions that once enabled broad-based opportunity are being eroded by concentrated private interests. The chapter concludes that realizing the American Dream’s promise requires strong democratic institutions that expand positive freedom for all citizens.

Sustainability transitions research explores how societies transform socio-technical systems towards evolving sustainability goals. This chapter introduces key concepts, development, and significance of this interdisciplinary field. We define sustainability transitions through three core components: socio-technical systems combining technology and social structures, transition processes as multi-dimensional shifts over long timespans, and the evolving, contested nature of sustainability goals. Since its 1990s origins, the field has expanded to include diverse theoretical frameworks and methods. While established frameworks offer valuable tools, emerging research on spatial dimensions, power dynamics, and methodological diversification is crucial for addressing contemporary challenges. This chapter lays the foundation for the handbook, previewing key debates and themes explored in subsequent chapters on theoretical frameworks, transition dynamics, methodologies, and future research directions.

Should central banks favour green assets in their operations? This question has caused an intense debate in the Euro area and the UK, focussed on corporate bond portfolios purchased by the Eurosystem and the Bank of England. It has been argued that their initial purchases supported economic activity that was not consistent with the stated targets of the EU and the UK governments to hit net zero carbon emissions by 2050. Sustainability issues are not a primary objective for central banks, and their independence could be damaged by exceeding their remits. Nevertheless, the risks arising are highly relevant to their existing primary objectives. Furthermore, central banks and all other institutions must do what they can if society is to deal with the growing existential threat. That draws on their secondary objectives. We argue that: (1) Not only is it permissible for a central bank to be involved in climate mitigation activities, but existing mandates require it. (2) The expansion of central bank balance sheets gives room for more action. (3) All market operations are in scope. (4) Central bank staff do not need to make capital allocation choices between businesses. (5) There is no trade-off with monetary policy objectives.

Urban sustainability transitions research has grown into a prominent field since the late 2000s. This chapter traces its historical evolution, offering a concise overview of key debates, defining terms, and examining methodological implications. It explores recent discussions on actors, agency, intermediation, governance, and urban transformative capacities. Drawing on the ‘City of the Future’ project in Dresden, Germany (2015-2022), it illustrates practical applications of research. The chapter concludes with an outlook on emerging priorities and methodological innovations, advocating a shift from short-term, project-based urban research towards long-term real-world laboratories. These would serve as enduring social research infrastructures, fostering sustained partnerships among academia, policymakers, businesses, civil society, and citizens to collectively experiment with and navigate transformative urban change.

Analysing interactions between niches and regimes is critically important for understanding sustainability transitions. What complicates interaction is the fact that sustainability is often understood and pursued differently in regimes compared to niches. That means the aims and criteria for innovation can be different on either side of the interaction. A paradox arises in which interaction will be easiest when there is already good alignment between niche and regime sustainability criteria, but such alignment will by definition not demand very great changes in the regime nor empower more radical niche experiments. In practice, four different interactions coexist: differentiation; co-option; hybridisation; and criticism. These interactions work in both directions, can be interdependent upon one another, and influence wider change processes over time. It becomes problematic to conceive reconfiguration as a single transition process originating in niches and linking to regimes. This is illustrated with an example that contrasts sustainability in the automation regime of the Fourth Industrial Revolution (4IR) with a niche space that we call post-automation. In becoming attentive to niche-regime interactions, so the politics of sustainable transitions becomes clearer.

Chapter 3 examines capitalism’s core principles through a three-way comparative analysis of American capitalism, Nordic capitalism, and Soviet socialism. It establishes capitalism’s defining features – private ownership and market mechanisms – while revealing crucial variations in how different societies implement these principles. The chapter introduces the distinction between oligarchic and democratic capitalism, highlighting how power distribution shapes market outcomes. Through detailed examination of property rights, labor markets, and price mechanisms, it demonstrates how Nordic and American capitalism differ despite sharing fundamental market principles. The chapter concludes by exploring sustainable capitalism’s dependence on democratic institutions, arguing that well-functioning democracy is essential for markets to serve broader societal interests. This analysis sets up the book’s central argument that Nordic-style democratic capitalism offers valuable lessons for realizing sustainable capitalism.

While most sustainability transitions researchers agree on the need for cross-disciplinary collaboration, such collaborations can be difficult in practice. Scholars often disagree on (a) how to understand the world (ontology) and (b) what constitutes important knowledge about transitions (epistemology). From this observation, this chapter explores ontological and epistemological debates in sustainability transitions research. It begins by outlining dominant frameworks, particularly the multi-level perspective (MLP), and their foundational assumptions drawn from evolutionary economics and science and technology studies (STS). The chapter identifies two main criticisms of the MLP: the need for an expanded epistemic focus and ontological critiques from proponents of ‘flat ontologies’ and critical realists. It then discusses new epistemological approaches that challenge the dominant narrative that transitions primarily emerge through innovation journeys. These criticisms focus on capitalism, coloniality, and justice, highlighting how mainstream transition studies tend to externalise such concerns. The chapter concludes by supporting radical theoretical pluralism as key to understanding sustainability transitions’ increasing complexities.

Social practice theories have become increasingly prominent in sustainability transitions research. By drawing attention to everyday life and social dynamics as key issues in sustainability transitions alongside technologies, infrastructures, and policies, practice theories provide valuable contributions to transition research, governance, and intervention design. Instead of focusing solely on individual behaviours or structures, they view practices - collective patterns of human activity - as the central unit of analysis, emerging from and at the same time shaping (infra)structures and behaviours. Therefore, practice theories can be fruitfully utilised as an alternative or complementary perspective on sustainability transition frameworks to identify, explain and address the social dynamics of change. In this chapter, we show how social practice theories can be used to study - as well as to bring about - innovations and disruptions for sustainability transitions. We start by providing a concise overview of what practices are and how they change. We also showcase an example of a practice theory-inspired change initiative as well as discuss the main differences, similarities, and synergies of social practice theories and the multi-level perspective of socio-technical transitions. We end with outlining some of the on-going debates and further research needs.

Recent years have seen great strides in the deepening of our understanding of how sustainability factors – in particular those related to environment, society, and governance (ESG) – may act as drivers of financial risks, and therefore are of relevance to institutions responsible for oversight of the financial sector. This chapter reviews these arguments in the context of the progressive inclusion of sustainability factors in microprudential regulation of the banking sector. New rules at international (Basel Committee for Banking Supervision, Network for Greening the Financial System), regional (European Union), and individual jurisdiction levels require that banks include ESG considerations in their governance. How such rules are implemented on the ground is contingent on the regulatory oversight architecture, that is, how the responsibility for different objectives and financial sectors is repartitioned between different public authorities, as well as the broader institutional framework in which the latter operate. The chapter analyses from this perspective practices of microprudential supervisors in the EU (European Banking Union, Hungary, Sweden) and beyond (Brazil, United Kingdom) that are seen to be leaders in the trend, with a view to distilling the institutional factors shaping the ‘greening’ of supervision with regard to scope of prudential sustainability concerns and the instruments used. Four out of the five studied jurisdictions have delegated banking supervision to the central bank, which is interesting, not least given the significant heterogeneity of financial supervision models globally. The chapter concludes with a discussion of the implications of the comparative analysis with regard to legitimacy (e.g. market overreach) and institutional implications (e.g. need for development of accountability, institutional design) of micro-prudential supervision and regulation, in particular with regard to central banks.

The Deep Transitions framework expands sustainability transitions research by analysing the long-term co-evolution of multiple socio-technical systems. It argues that current system configurations drive both environmental crises and social inequalities. Unlike traditional transition studies, which focus on single systems, Deep Transitions links historical trajectories - such as the Industrial Revolution - to the First Deep Transition, marked by fossil-fuel reliance, mass production, and unchecked resource use. The framework integrates sustainability transitions theory with longwave economic cycles, emphasizing shared meta-rules in shaping industrial modernity. Empirical applications include historical analyses of mass production, international governance, and wars as landscape shocks. The envisioned Second Deep Transition aims to reconfigure socio-technical systems towards planetary sustainability and social equity. Future research should refine the framework through empirical testing, engagement with socio-ecological systems, and governance innovations. Deep Transitions challenges conventional approaches by highlighting systemic inertia, global inequalities, and the need for a just transition.