The Future of ESGTech: Goal 10 - Reducing inequality

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The Future of ESGTech: Goal 10 - Reducing inequality

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Reduce inequality within and among countries. This is an extract from Finextra's The Future of ESGTech 2022 report.

Focus target 10.5: Improve the regulation and monitoring of global financial markets and institutions and strengthen the implementation of such regulations.

As with many SDGs, the UN notes that the pandemic is likely to reverse some of the progress made towards this goal. Blackrock noted that SDG 10 has the lowest average progression of any of the Goals, with just 32% of the full target being achieved. Additionally, the UN noted that the pandemic has exacerbated existing inequalities.

Santander has established 10 responsible banking goals to be obtained by 2025. Of these, a number seem to contribute to women’s equality specifically, but there those which aim for more general equality such as number five, which aims to, “financially empower 10 million people between 2019 and 2025 by providing access to customized financial services, products, and improving their financial knowledge through teaching,” or number nine which aims at, “granting 200,000 scholarships, internships, and entrepreneur programmes between 2019 and 2021, showing that the entity understands education as a basis of an equal society and a strong economy.” Finextra could find no updates on the progress of these policies.

BNP Paribas’s approach to Goal 10 appears to be through the lens of financial inclusion. The group mentions that it engages in poverty reduction and financial inclusion through microfinance, stating that in the past 30 years the group has financed 84 microfinance institutions in 33 countries, totally €900 million in loans. They additionally add that their offshoot, Nickel, offers accounts to everyone above the age of 12 to open a bank account. Nickel is currently only operational in France, but the model is planned to be exported to Belgium and Portugal in 2022.

BBVA also boasts of it's use of microfinancing with it's Microfinance Foundation, which focuses specifically on projects is South America. BBVA's Microfinance Foundation aims at giving, “vulnerable people access to the financial system, making use of technology and innovation to offer them products and services that are adapted to their needs.”

One final area of concern is over migrants. Several of the targets of Goal 10 are aimed specifically at migrants, a position which development banks have supported. The Inter-American Development Bank (IADB) has a Migration Unit which since 2019 has in approved a number of investment grants aimed specifically at migrants, including for $55.9 million support water and sanitation, education, and social inclusion for about 1 million beneficiaries in Colombia; 367,000 in Costa Rica; and more than 200,000 in Ecuador and Peru.

The International Development Association, a subgroup of the World Bank, established the Window for Host Communities and refugees to provide immediate and long-term support. The Window is expected to finance up to $2.2 billion in projects, including $1 billion for operations responding to the impacts of the pandemic.

ACTION FOR 2022: Make investment more available to developing countries, using special and differential treatment where needed.

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