In our previous article, we covered the topic of environmental sustainability in Fintech and how the industry is quickly facilitating green finance. If you haven’t read it yet, click here.
Sustainability is about meeting our present needs without compromising the future generations’ chances of meeting theirs. However, in a business context, sustainability is bigger than a PR stunt or a green product line, it’s about businesses finding ways to thrive in the long term.
In this article, we’ll learn about what social sustainability is, the impacts Fintech has on it, and why it matters.
What is social sustainability?
Social sustainability is described as a measure of human’s welfare. From a business perspective, it is about determining the impacts of corporations on society. This includes understanding human rights, society’s living conditions, health, safety, and wellness, as well as work-life balance, community engagement and more.
There are three pillars of corporate sustainability which are environmental, economic and social. And while all three should be properly addressed, social sustainability is an often overlooked aspect of sustainability. This is mainly because issues under social sustainability are not easily quantified or measured.
Over the last decade, the world has been mostly focusing on economic sustainability. Although this has been proven beneficial to some parts of the world, a large part of the world is still grappling to make a living.
It’s important to understand that decisions made by the company can directly or indirectly affect employees, customers, and the local community. This is why social sustainability development is crucial. Because without it, business operations and growth can deteriorate.
Fintech’s impacts on social sustainability
1. Increase financial inclusion
It’s no surprise that Fintech companies have long been at the forefront of innovation in financial services. Traditional financial services providers are finding it difficult to innovate because of regulations and compliances. Fintech, on the other hand, is helping to increase financial inclusion all around the world. This is in line with eight of the 17 UN’s Sustainable Development Goals (SDG), which is ensuring universal access to financial products and utilities to end poverty and hunger, as well as achieving gender equality. Fintech has allowed for more convenience and ease of use with multiple financial services made available in a single application that is also accessible across international borders.
2. Assist small companies in creating jobs
We all know how Fintech has the power to boost economic growth. But what we don’t know is that Fintech helps SMEs to grow and innovate. According to ING economist, Gerben Hieminga, SMEs are deemed too big for microfinance but are too small for traditional banking—they are the missing middle. Before Fintech, it was very difficult for these missing middles to obtain loans. But with new inventions and technologies, Fintech is helping small companies, even in the poorest countries, to grow and create more jobs.
3. Promotes responsible consumption and production
Fintech and sustainable finance create countless opportunities and potential for businesses to become more sustainable as they allow companies to be more resilient by promoting green finance and sustainable development. Minimising the use of natural resources, financial technology is a superb tool to build sustainable communities and overcome poverty as it promotes responsible consumption and production.
Why does all of this matter?
We are expecting a world population of 9 billion people in 2050. If we wish to become sustainable, we must start giving social sustainability urgent attention, just as we would for environmental and economic sustainability developments. Corporations, business owners, consumers, and community members must understand the impacts that corporations have on society and find solutions to promote social welfare.
What is TranSwap doing to support this?
We are working on new plans and initiatives to empower the underprivileged and the youth through financial literacy and basic coding lessons. As our continued efforts to support our community, the team at TranSwap has worked closely with the Migrant Workers' Centre to prepare care packages for migrant workers and provide disadvantaged children with the essential tools for learning, together with Social Health Growth. Within our organisation, TranSwap also practices fair hiring to ensure equal opportunities are given to people of all races, genders, and religions.
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