Make cities and human settlements inclusive, safe, resilient and sustainable. This
is an extract from Finextra's The Future of ESGTech 2022 report.
Focus target 11.5: By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters,
with a focus on protecting the poor and people in vulnerable situations.
It is estimated that by 2050, 68% of the global population will live in cities. The
UN reports that the pandemic has impacted the progress of this Goal, however, even before Covid-19 the quality of life within cities was decreasing globally. The numbers of slum dwellers was on the rise and had exceeded 1 billion in 2018, being most prevalent
in three regions, Eastern and South-Eastern Asia (370 million), sub-Saharan Africa (238 million) and Central and Southern Asia (226 million). As of 2019, only one half of the world’s population had convenient access to public transportation (within a walking
distance of 500 meters). At the same time, UN research found that of the 911 cities in 114 countries and territories data was collected from between 1990 and 2019, spatial urbanisation was occurring at a much faster rate than population growth, particularly
in smaller cities.
In part, many banks' sustainable and green financing decisions can contribute to this Goal, as target 11.6 aims to reduce the environmental impact of cities.
Santander has pledged to facilitate the movement of €120 billion between 2019 and 2025, and €222 billion between 2019 and 2030 in green finance to help tackle climate change.
In 2019
BNP Paribas had a total capital investment of $9.8 billion dollars in green bonds, and €12.2 billion in sustainable bonds. Projects available for their green bonds included improved green infrastructure (like LED street lights), green buildings, and improvements
in transportation, including energy efficient public transport.
Part of Citi Bank’s SDG plan is referred to as ‘Citi for Cities’. The aim of this is to, “partner with governments, businesses and communities to identify and implement
innovative solutions that help cities thrive during this period of unprecedented urban transformation. This approach, which we call Citi for Cities, leverages the powerful combination of our expertise in a wide range of areas such as bond issuances, digital
payments and risk management to help urban leaders secure financing for infrastructure projects, find internal efficiencies to free up valuable resources, and leverage new technologies to automate and streamline service delivery.”
An
example of the kind of investment Citi for Cities investments is the construction of the City of Panama Line One metro extension. The City of Panama was characterised as “inefficient and marked by congestion, road insecurity, and inadequate infrastructure.”
Citi arranged more than $600 million for the Republic of Panama, coordinating with the Official Agency financing solution that incorporated both Export Credit Agency (ECA) and Multilateral Institution-guaranteed debt.
Future smart city technology created by fintechs may contribute to this Goal. However, one way they are already contributing is through payment systems. Public transport can often be inefficient because of payments, digital payments often improve this. For
example, in
Rwanda buses moved from tap-and-go smart cards from cash, helping the bus operator raise revenue by 140%. Additionally, these payment methods can allow for the collection of data which can in turn be used to improve transport systems.
Target 11.4 aims to protect the world’s cultural and natural heritage. In 2018 the
New Development Bank (NDB) loaned $220 million to help nine small historic cities in the Russian Federation renovate and preserve their cultural heritage, develop tourism infrastructure, modernise urban
infrastructure, and restore the ecological environment. This project is expected to increase the annual tourism to these cities by 50% by 2024. In 2020 this scheme was expanded to include a further eight cities.
ACTION FOR 2022: Develop projects which aim to improve the living standard, sustainability and convenience within cities.