A sustainable finance approach, derived from the Resource Nexus, could be a key aspect of the evolution of the global financial architecture into a financial system that is not primarily focused on its own stability, but rather, serves to finance ecologically and socially sustainable development. This module not only explores the ways by which Resource Nexus projects can better address financial and trading systems; it also delves into the means of enabling financial and trading systems to adhere to sustainable development within planetary boundaries in a just and safe way. Meeting the challenge of managing and financing the resources needed for human life in a sustainable way forms the basis of this Resource Nexus module.
A Resource Nexus perspective on financing sustainable development enriches the analysis of the integrated management of environmental resources flows by including the associated financial flows. In addition, implementing solutions for improved environmental resources management often requires investment in physical infrastructure (covered in theme 2.2.3). To complement the analysis of the Resource Nexus and develop actionable recommendations, the financial implications need to be considered simultaneously. For example, a Resource Nexus analysis shows the connections between water, land and energy use in a region, which are often also a result of economic conditions. Resource Nexus Finance identifies the monetary flows underlying the material flows of water, land/food and energy, and develops financially viable concepts for an optimised use of environmental resources. This topic extends the heuristics for analysing the interrelationships of environmental resources to include not only economic implications but financial market linkages.