A key part of UN’s agenda for sustainability is the taskforce for digital finance . Officially launched in November 2018, around the same time as the UN’s Principles for Responsible Banking , the taskforce is specifically tasked by the Economic and Security Council (ECOSEC) to look at how the financial system and technology can assist in achieving the UN’s Sustainable Development Goals (SDGs) discussed yesterday.I would write a lot more, but the guys at the taskforce have done that for me:
Why the Task Force was created
Achieving the Sustainable Development Goals will require everyone to work together and business, particularly the financial sector, has a very important role to play. Digital technologies are revolutionizing every aspect of the financial system. Digital finance is enabling new business models—many of which could be linked to the SDGs—and laying what could become the foundation for fundamentally more inclusive economies.Ensuring that this happens—that the power of digital financing is put to its highest and best use—requires leadership. The Task Force was created to provide that leadership.
What the Task Force is
The Task Force is a select group of leaders and top experts from around the world. Members include government ministers, tech entrepreneurs, bank and investment CEOs, central bank governors, civil society representatives, multilaterals, and thought leaders. They come from developed and developing countries. They bring diverse professional and life experiences—and diverse points of view. They are rule-makers, market leaders, and market disruptors. They are going to work together throughout 2019 to explore deeply how digital financing can advance the Sustainable Development Goals.The term ‘digital financing’ encompasses digital finance and the financial technologies (‘fintech’) that underpin it. In addition to mobile connectivity, these technologies include (but are not limited to) big data, artificial intelligence, distributed ledger technology (‘blockchain’) and the Internet of things.All of these technologies offer opportunities to foster more sustainable finance and investment. More sustainable finance and investment, in turn, is a necessary catalyst to create the world envisioned by the SDGs.
How the Task Force works
The Task Force is starting by undertaking a range of public and private consultations. It is gathering input from individuals and institutions worldwide in order to recommend a series of research projects. Such projects will likely include a mapping of innovative and scalable international practices covering all of the Sustainable Development Goals, digital finance technologies and business models, and analysis of major opportunities and constraints. Recommended research might also include more in-depth pieces on specific opportunities such as: better ways to mobilize domestic savings for sustainable investment; financing clean energy, water, education and health services; creating jobs; and serving migrants, refugees and vulnerable populations.The Task Force’s report of recommendations will stress practical, actionable strategies.
What the Timeframe is
The Task Force will present its initial findings and recommendations during the General Assembly in September 2019. It will then conclude its work no later than early 2020.Meantime, they just produced an interesting report that looks at how the digitalisation of finance supports the SDGs. Not available online, and with a note underlined on each page saying Not for citation or distribution , the report talks about how markets are changing, new players are creating new ways of doing finance and more.My take-away is that there are two key fundamental shifts happening in the world that the UN is focused upon (there may be more, but these are the two priority ones).First, there are aims to create equal opportunity for all, to eradicate poverty, to give women and children equal rights and protections and more. These SDGs can be achieved by enabling financial services to reach the unreachable, enable all to gain access and opportunity and to not just bring one, but to bring all. That can be achieved through financial inclusion movements but, more than this, it means focusing upon small business financing, community financing, project financing and services that can be delivered through the mobile network to anyone with a telephone (not necessarily a smartphone).Second, the SDGs specifically are focused upon a sustainable planet and halting climate damage, ecosystem breakdown and activities that are environmentally unfriendly. These can be supported by focusing upon sustainable finance and responsible banking. That means shifting banks to consider how their lending and financing of corporate and commercial clients might impact upon the SDGs. If you provide a letter of credit and a loans book to a fossil-fuel firm, how can the bank ensure that firm is equally investing in renewables and carbon offset programs?These two fundamentals are (a) creating new financial firms focused upon reaching the unreachable; and (b) changing traditional institutions to focus upon sustainability. Laudable activities but, in the latter case, hugely challenging. I’ll talk about that more later in the week.Related: The Regulator’s View of Facebook’s Libra Currency