SDGs and the financial sector: what is going on?

By December 23, 2021No Comments

In an increasingly digital world, where demands and needs seem to be resurfacing around the creation of a more (or at least minimally) sustainable future, there are two challenges for companies around the United Nations Sustainable Development Goals (SDGs): on the one hand, coherence and, on the other, profitability.

There also seem to be two potential solutions to meet those goals: innovation and communication. In this article, we will focus on the conclusions of the digital and media analysis on the SDGs and sustainable development recently conducted by one of our members, Agencia comma, as well as on its implications for the financial sector.

To consolidate and legitimize sustainable strategies, while remaining efficient and profitable

We have known for a few years now that sustainable development is here to stay. We are immersed in an emerging economic, social and environmental framework with sustainability at its core.

A few years ago, more importance was given to the term “circular economy”, which is still valid, but now we also find new trends such as SRI and ESG or corporate commitments which do not focus on the environment only but also on inclusion and equality.

In this context, there is one main challenge for companies, public administrations and other entities: to consolidate and legitimize sustainable strategies, while remaining efficient and profitable and without losing the differential value of aligning themselves with sustainable and socially responsible criteria.

To this end, two key solutions can be identified: innovation and communication. Innovation, which will continue to transform the economic model, incorporating new tools and more efficient methods, where digital transformation plays a key role. And communication, which will allow us to build and disseminate a truly solid social and environmental reputation, positioning us as agents of change, advocating sustainable development with criteria and authority, but, above all, with coherence.

The financial sector is one of the sectors that has most appropriated the term sustainability but there is an emerging risk of greenwashing

Under the term ‘Sustainable Finance’, the financial sector is one of the most present in the framework of sustainability, possibly due to the strong interest in investment trends based on ESG criteria. Within the traditional financial, economic and investment sector, there is a conversation about different forms of investment: responsible, sustainable, impact, renewables, etc., but new factors are emerging with force, such as FinTechs and its relationship with innovation or startups.

Although the sustainability of new products such as cryptocurrencies or Blockchain technology is in question within the traditional sector, there is a predominantly positive sentiment around these new products and investments.

As with CSR-related narratives, sustainable investment tends to be drawn more as a branding tool than as a real and immediate change initiative. Sometimes, companies join the sustainable investment trend because of a certain sense of pressure and/or obligation stemming from investment selection criteria on the part of investment managers and funds, rather than because of a deep commitment.

Therefore, some of the narratives refer to the residual but emerging risk of sustainability being used as a mere greenwashing tool.

Main conclusions: shifting paradigms

There is an urgent need to redefine the way in which narratives on sustainability and social commitment are conceived. A greater involvement of the people and organizations that talk about it would be necessary in order to make these debates more widespread and stop them being attributed to a specific group within the political spectrum.

In short, a broader understanding of the emergence of these changes is required, uniting voices with the sole objective of repairing the present in order to build a minimally sustainable future.

Social and labor demands can only be seen as a loss (of rights, freedoms, quality of life or privileges) if we look at it from an individual prism. Perhaps, precisely for this reason, we need emerging voices to reinforce the idea of the collective and the common good as the ultimate logic of possible change.

With respect to all this, we can draw several conclusions based on the report (accesible here in Spanish):

1. While there is an emerging debate on sustainable development, it lacks depth. Descriptive, introductory content predominates, while more specialised research and sources do not reach large audiences.

2. Sustainability is still widely understood in a strictly environmental context which reveals a significant lack of knowledge on the subject.

3. Although there is some content that is not really shallow, it does not connect with the audience. The few sources that publish with rigor and judgement do not achieve greater visibility than those that do not.

4. Instead of being used as a philosophy of change, many public and private entities jump on the sustainability bandwagon because they see it as a tool to improve their image. Green marketing is a tangible reality.

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