Changing the future of finance: six key insights

The Deep Transitions Lab combines an historical analysis of how fundamental changes unfolded in the past with a focus on the future to help redirect those crucial drivers of change into a sustainable direction. We are now applying our research to the finance sector through an historical analysis of the investment system from the 1750’s to present day – to understand how the current system was formed and help direct it towards a sustainable future. We held a three-day workshop with historians and investors to kick off the project. 

The workshop focused on the critical role of applied history in understanding and transforming the finance system, particularly in the context of the ongoing polycrisis. History is not just a record of the past but also a resource for identifying path dependencies and imagining alternative futures.

Six key takeaways

1. Path dependencies: How historical practices shape present constraints

Current financial and legal structures are often rooted in historical precedents that continue to shape today's options—usually in ways that reinforce inequality and extraction.

- Santeri Tiilikainen challenged the view that today’s global investment rules arose solely from late 20th-century neoliberalism, tracing their origins instead to foreign direct investment disputes in Latin America between 1870 and 1930. These early legal practices embedded investor protections over local sovereignty, creating lasting tensions and path dependencies that continue to shape global finance

- Similarly, Zahar Koretsky’s work showed the deep entanglement of fossil fuels across energy, mobility and finance systems with influential financiers institutionalising norms such as profit maximisation and short-term returns. 

- Merel Blok’s presentation showed how the 1820s British financial bubble helped revive post-independence Mexico’s mining sector through speculative investment and technological transfer. Despite its short-term instability, this capital flow created lasting economic dependencies and aligned Mexico with global financial systems—illustrating how even brief shocks can shape long-term development trajectories.

Takeaway: Effective transformation requires confronting not just current practices but the historical trajectories and infrastructures that sustain them.

2. Legal and institutional plasticity

Rather than seeing law as a rigid constraint, several presentations argued that legal frameworks are malleable, socially embedded, and capable of evolving in line with changing social values—if pressure is applied.

- Michael Milo and Emanuel Dongen reframed law as an interpretive and social practice, not just a top-down system of rules. Law includes fairness, sustainability, and public interest, showing it is as a flexible, bottom-up process that reflects and shapes society’s evolving values.

- Rutger Claassen similarly showed that corporate forms are not fixed. Alternatives like steward ownership and foundation-owned firms already exist in law. What’s missing is scaling infrastructure and supportive financing.
   

Takeaway: Change requires engaging legal interpretation, challenging dominant norms, and supporting alternative institutional forms through practice and narrative.

3.  Concentration of power and loss of agency

Modern financial systems have become highly centralised, complex, and opaque, eroding individual and collective agency.

- Presenters critiqued how financial consolidation, intermediated ownership, and algorithmic complexity have distanced individuals from financial decision-making.

- Tools like crowdfunding, cooperatives, or blockchain-based decentralised finance were seen as potential restorers of agency, though not without risk.

- Phil Johnstone’s and Mario Laul’s work explored how the finance system evolved in the digitalisation surge, showing how digital technologies have restructured finance, amplifying both its reach and its extractive potential.

Takeaway: Restoring financial agency requires more than new tools—it demands institutional redesign and cultural shifts to reconnect finance with democratic values and lived realities.

4.  The importance of considering regional contexts

Alternatives to dominant financial and corporate models are already being experimented with—but face significant structural, cultural, and political barriers. There is a need to look at different localities and how local contexts shape (un)sustainable finance practices.

- Public banks like Germany’s KfW demonstrate that long-term, mission-oriented finance is possible by aligning finance with public purpose, explained Dennis     Duennwald.

- Grietje Verhoef described how African financial histories show how regional dynamics and colonial legacies shape access to financial tools, reinforcing unequal global integration and necessitating regionally grounded solutions.

Takeaway: Alternatives exist—but scaling them requires challenging capital’s dominant logics, designing supportive financial infrastructures, and contextualising reform to local and historical conditions.

5. Financing the transition: from fossil lock-in to sustainable futures

Transitioning away from fossil fuels is not just a technological problem—it’s a financial and institutional one. And the current system isn’t equipped to do the job.

- Onat Güneş explained how, since the Industrial Revolution, finance has been deeply intertwined with fossil fuels, driving their expansion through profit-focused investment norms. While recent shifts toward green finance suggest change, research reveals banks continue significant fossil fuel financing.

- Friedemann Polzin argued that divestment strategies have proven insufficient and that engagement and systemic reform—including transparency, public oversight,     and South-North rebalancing—are more promising routes.

- Zahar Koretsky explored how the fossil fuel industry co-evolved with finance. Focusing on key financial actors, he mapped how investment banks helped to shape the     practices and norms of fossil-fuel investing.
   

Takeaway: Climate finance reform must go beyond ESG tweaks. It requires confronting fossil entanglements, redefining fiduciary duty, and designing systems capable of valuing long-term public goods over short-term returns.

6. Language, narrative, and imagination as tools of transformation

Institutional change isn’t only technical—it’s deeply cultural and narrative-based.

- Transformative change, as several speakers stressed, requires new language, different mental models, and bottom-up practices that reframe what’s possible and     desirable.

- This includes reframing  how we understand "value", "ownership", "investment", and "risk"—and who gets to define them.

- In this sense, financial reform becomes an imaginative act, not just a procedural one, opening space for different futures.

Takeaway: Changing the future of finance means also changing how we talk about it, how we imagine it, and whose stories are legitimised in the process.

Next steps

Special issue of the journal of applied history

We are exploring whether there is interest for creating a special issue focused on applying historical research to current finance and investment systems. This will be a flexible format: 4k–8k word articles; peer-reviewed by contributors.

Future finance system design: the Deep Transitions panel process

We are planning to design a Global Investors Panel with the goal of co-creating a vision for a sustainable finance system (e.g. for 2050), pathways to get there, and implementing first steps. This will be based on historical research and stakeholder input (investors, practitioners). The process will aim to value learning, co-creation, and bottom-up rule change, not just policy tweaks.

Key insights 

• Current financial rules are constructed and can be changed.
• Historical research will support the panel process with briefings and insights.
• Desired future rules include: long-termism, risk awareness, collective wellbeing, transparency, simplification, fiduciary reform, and broader impact metrics.
• Finance should serve the real economy, not just extract value.
• The Global Investors Panel aims to build a niche, not confront incumbents—but engaging actors is important.
• The panel should have diverse representation (in terms of Global South and Global North, and in terms of type of investors, from state and commercial banks to institutional investors, sovereign wealth funds, family offices, philanthropy, etc.).

With thanks to all our presenters:

Michael Milo and Emanuel Dongen, Sustainable Financing in the Fabric of Law – a History of Public Interests and Competing Legal Formants

Santeri Tiilikainen, Continuities of Capital: International Law, Foreign Investment, and the Rules of Global Finance in Latin America, 1870-1930

Rutger Claassen, The Corporation: a Return to Origins 

Phil Johnstone, Digital and financial twin-transitions during the fifth surge of industrial modernity

Mario Laul, Public Blockchains and the Digital Revolution 

Merel Blok, Beyond the Bubble: The Global Aftermath of an Emerging Market Bubble

Dennis Duennwald, The Financing of Environmental Protection in the Global North, 1970s-1990s

Grietje Verhoef, The lagging service sector: Banking and financial services in Africa - from pre-colonial to post-colonial contexts

Zahar Koretsky, Mapping key actors behind the fossil-fuelled world of the First Deep Transition

Onat Güneş, Incumbent Institutions, New Rules: Commercial Banks and the Financing ofRenewables

Friedemann Polzin, Financing the energy transition – thinking inside and outside the box

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With special thanks to our funders Sam Bonsey and Institutions for Open Societies Utrecht University.

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