Sustainable finance within planetary boundaries

Purpose This study develops an integrated framework to reframe the foundations of finance theory and apply them to reform governance logic and rationalize an operational blueprint for institutionalizing the creation of long-term value that benefits society and the environment through enforceable governance and regulatory mechanisms. Design/methodology/approach An interdisciplinary conceptual synthesis to reconcile evidence from Earth system sciences and social complexities with the theoretical foundations of finance. Findings Our analysis shows that institutionalizing sustainable long-term value creation necessitates reframing the foundations of finance theory. The prevailing neoclassical paradigm, which assumes atomistic market actors and treats social and environmental factors as exogenous, is structurally incapable of pricing risks arising from breaches of planetary boundaries and social thresholds. We propose an embedded conceptualization of the firm within interconnected biophysical and social systems. The reframe conceptual framework leads to reforming corporate governance and the regulatory architecture to internalize systemic externalities through enforceable mechanisms that align capital allocation for a resilient and just transition. Originality/value This paper contributes to sustainable finance and corporate governance in three ways: by reframing the neoclassical model of the firm as embedded within biophysical and social systems; by integrating planetary boundary research with firm-level valuation and governance, clarifying how ecological risks affect long-term firm value and financial stability and by operationalizing sustainable value creation through an integrated framework and governance architecture that internalize systemic risks and enable scalable, long-term value.