Central bank mandates have evolved with time beyond price stability and economic growth objectives to include financial stability, financial inclusion, and, more recently, climate change in some jurisdictions. This chapter analyses the potential role of central banks in dealing with increasingly significant climate risk. Existing literature suggests that physical and transition risks from climate change are key risks to macroeconomic and financial stability. The chapter argues that central banks should, therefore, at a minimum, incorporate climate risk in their macroeconomic and financial stability risk assessments to determine appropriate policy and regulatory tools for addressing them within the boundaries of existing mandates and underpinned by a transparent framework of decision-making and accountability. Central banks should avoid mission creep by remaining focused on achieving clear statutory objectives, while at the same time avoiding possible legal and credibility risks from doing nothing or too little, too late. The chapter further argues that central banks in emerging and developing economies face peculiar challenges in assessing the dynamics of climate risk, estimating potential impacts, and calibrating tools to address potential impacts on price or financial stability. It concludes by recognising progress at the international level and calls for additional guidance, particularly for central banks in emerging and developing economies, to help design proportional and effective central bank policy and regulatory measures to help contain significant climate risks they face.

Chapter 1 introduces the Nordic nations – Denmark, Finland, Iceland, Norway, and Sweden – as inspiring examples for transforming capitalism toward sustainability. It establishes their consistent leadership across global benchmarks in areas including sustainability, democracy, and societal well-being. The chapter addresses common misconceptions about Nordic societies, particularly the frequent American mischaracterization of their market economies as “socialist.” Through empirical evidence and personal narrative, it traces the region’s remarkable transformation from nineteenth-century poverty to contemporary shared prosperity. It examines how Nordic experiences might inform improvements to American capitalism, while acknowledging key differences between contexts. It also introduces fundamental features of Nordic capitalism, including universal social systems, stakeholder orientation, and democratic institutions. The chapter concludes by positioning Nordic capitalism as a valuable source of insights for realizing sustainable capitalism, while acknowledging its imperfections and ongoing challenges.

This chapter discusses the role of visions, expectations, and socio-technical imaginaries in shaping sustainability transitions. Imagining futures different from current socio-technical regimes is essential for legitimizing and mobilizing niche technologies and driving system change. More recently, mission-oriented and transformative innovation policies have emphasised envisioning and collective expectations in defining and implementing long-term goals. The chapter introduces the historical development of these concepts within sustainability transition studies, including transition management, strategic niche management, and technological innovation systems. It presents and compares various anticipatory practices and techniques for exploring and shaping transition dynamics. ‘Futuring methods’ such as scenario development, technology foresight, roadmapping, and modelling are not just neutral tools but shape political problems and solutions. The chapter concludes by illustrating the influence of visions, expectations, and imaginaries in the historical evolution of hydrogen futures and highlighting key research trends.

Proposals for deploying monetary policy to fight climate change and reduce inequality rely on the use of the nation state’s monetary authority to allocate capital to different parts of the economy. Against those proposals stands the publicly stated commitments of central bankers to avoid ‘allocating credit’ by implementing ‘market-neutral’ policies. A review of the financial empirics of central banks’ market operations shows a historically consistent pattern of using monetary authority to allocate debt and equity capital to different sectors of the economy at critical moments. Legal frameworks impose no effective constraints on that state-guidance of investment and, when necessary, the law of central banking actively facilitates capital allocation in ways that allow policymakers to fight deflation, provide emergency fiscal support, and rescue crisis-stricken parts of the financial sector. Against those empirics, commitments to avoid capital allocation appear as communication strategies rather than descriptions of the reality of central bank operations. Given the position of central banks as statutory public agencies, this creates various types of constitutional problems, notably concerning the protection of liberal property rights from government interference. Understanding these legal, market, and political dynamics provides a principled basis to debate reform proposals regarding the constitutional status and institutional functions of central banks in market economies responding to climate change and destructive inequality.

Sustainability transitions involve complex, long-term societal changes shaped by diverse actors within dynamic structural contexts. This chapter takes a role based perspective, distinguishing between social roles, which evolve with societal values and priorities, and transition roles, which reflect actors’ engagement with transition dynamics. It explores conceptual and empirical applications, highlighting research trends and gaps. Social roles provide insights into institutional change over time, while transition roles reveal how actors strategically position themselves within transitions. Emphasizing the fluid and negotiated nature of roles, the chapter concludes by advocating for longitudinal studies on social roles and the use of transition roles as a boundary object for action-oriented, transdisciplinary sustainability research.

Sustainability transitions have often been described as involving ‘disruptions’. However, many writings in this field have been imprecise about what disruption means in the context of transitions, beyond the disruption of the status quo. References to disruptions in the literature have ranged from a discourse on disruptive niche innovations to disruptive landscape influences. A systematic literature review revealed that the conceptualisation of disruption was often imprecise and empirical studies were largely focused on the energy sector. In this chapter, we build on this definition of disruption and complement the understanding by reviewing the most recent literature, adding to the initial review. This chapter provides much-needed clarity on the conceptual confusion that has emerged and evaluates the links between the concept of disruption and the ways in which mainstream technologies, practices, and business models in socio-technical regimes need to be phased out, destabilised, or undergo decline. We conclude by examining the relevance of the concept of disruption to emerging scholarly and societal debates on just transitions.

Chapter 10 synthesizes ten key lessons from Nordic capitalism to guide the transformation toward sustainable capitalism. Drawing on evidence from previous chapters, it demonstrates how Nordic societies have successfully coupled market efficiency with democratic accountability to advance sustainable development. The chapter emphasizes how overcoming denial, establishing universal systems, expanding positive freedoms, and fostering cooperation are essential for addressing global sustainability challenges. Through detailed analysis of Nordic policies and practices – from universal childcare to critical thinking in education – it shows how democratic processes can align market incentives with sustainability goals. The chapter concludes that while Nordic capitalism remains imperfect, it serves as a valuable “North Star” for realizing sustainable capitalism, offering proven approaches for expanding individual freedom through collective investment while operating within planetary boundaries.

This chapter delves into the role of power in sustainability transitions, addressing the limited attention power dynamics have received in the field despite their centrality to lasting societal change. Drawing on theories of power from various disciplines, this chapter introduces two conceptual frameworks to analyse power: (1) ‘power to, over, and with’, which examines how and which power relations change over time, and (2) ‘three relations of power, which focuses on how power relations are constituted and shape societal change. These frameworks are applied to a case study of community-supported agriculture (CSA) in Portugal, showcasing grassroots efforts to address socio-political and ecological challenges while striving for sustainable agri-food systems. The analysis reveals how power influences opportunities and barriers for transitions, emphasising the interplay between individual and collective agency, human and non-human interactions, and historical structures of social relationships. The chapter concludes by emphasising the need for more power-aware research that integrates diverse perspectives, including non-Western and Indigenous epistemologies, to deepen the understanding of power in sustainability transitions.

Sustainability transitions require systemic change, yet socio-technical systems are complex and interdependent, making transitions non-linear and path-dependent. This chapter explores how systems thinking and complexity science enhance our understanding of transition dynamics, particularly feedback loops, emergent behaviour, and lock-in effects. It reviews key frameworks, including the Multi-Level Perspective (MLP) and Technological Innovation Systems (TIS), and discusses how system dynamics modelling and complex systems approaches can identify leverage points for policy interventions. Case studies illustrate how these methods improve transition research and policymaking. The chapter concludes by highlighting methodological challenges and the need for hybrid models to integrate diverse analytical scales and approaches.

Chapter 5 examines the distinctive characteristics of Nordic leadership at the individual level, highlighting how cooperation and consensus-building form its core. It introduces the concept of “wicked problems” to demonstrate why Nordic leadership approaches – characterized by humility, collaboration, and democratic engagement – are particularly well-suited for addressing complex sustainability challenges. The chapter identifies key Nordic leadership norms including cooperation, modesty, humanism, and democracy, contrasting them with more hierarchical approaches common in American business. Through analysis of how Nordic leaders navigate complex challenges, it demonstrates why these leadership practices are increasingly relevant for addressing global sustainability challenges. The chapter concludes by arguing that while Nordic leadership may not suit every situation, its emphasis on cooperation and stakeholder engagement offers valuable lessons for tackling the complex, interconnected problems represented by the Sustainable Development Goals (SDGs).