Ensure sustainable consumption and production patterns. This is an extract from
Finextra's The Future of ESGTech 2022 report.
Focus target 12.6: Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.
The focus of this Goal is the “material footprint” of human use of natural resources. The UN finds that the material footprint of the world increased by 70% from 2000 to 2017. In 2021 the
UN found that the plastic pollution in the ocean and other bodies of water is expected to double by
2030.
A popular example of how this Goal can take action is through the reduction of things like single use plastics, seen in the ban on plastic straws. Many banks make individual pledges to lessen their waste. For example,
Santander pledged to eliminate unnecessary single plastic use in its branches and corporate buildings by 2021. Despite other pledges like this many of the top banks globally continue to invest in
plastic waste.
One way banks can help with this Goal is to implement proper sustainable supply chain management and supply chain responsibility.
ING chose Goal 12 as one of its focuses for its support of SDGs. ING states that it has, “ING has committed to better understanding the impact of our lending activities and to working with clients to drive sustainable progress,” and notes that it recorded
€7.1 billion in lending to industry ESG leaders in 2018, and aims at doubling this by 2022. An example of this is their sustainability improvement loans, the first of which they completed in 2017. The interest rate on these loans is linked to the client’s
sustainability performance and rating.
Investing in the circular economy is one way in which banks can lower their contribution over consumption and production.
BNP Paribas Asset Management launched its first circular economy Exchange Traded Fund (ETF), Easy ECPI Circular Economy Leaders UCITS ETF. BNP Paribas states that the, “tracker replicates the ECPI Circular Economy Leaders Equity index and offers investors
exposure to the performance of 50 international large caps selected for their active participation in a business model based on the circularity of goods, materials and raw materials.”
BBVA emphasised their commitment to this Goal in part through their pledge to have 70% of the energy the Group uses to come from renewable
sources by 2025, and 100% by 2030. Additionally they point to construction of infrastructure that does not damage the environment. BBVA City (the bank’s headquarters in Madrid) uses several algorithms that combine the information gathered by over 50,000 sensores
in the complex with other external data to get an energy savings equivalent to the annual consumption of 200 homes.
The transparency provided by
blockchain technology gives the opportunity for fintech to offer sustainable supply chain management. However, blockchain alone does account for 0.58% of the global electricity consumption, meaning its use of energy brings it into question.
Finally, the
Islamic Development Bank (IsDB) has also provided support for this Goal. In Azerbaijan, the IsDB supported a waste-to-energy project towards this Goal. The IsDB provided a €377.50 million loan to develop a waste-to-energy plant consisting of two incineration
units with the capacity to burn 33 tons per hour, with emission control. Between December 2012 and January 2020 the plant burned 3,281,343 tons of household waste creating 1,015,800MWh for the national grid. The result is that today 80% of Baku’s household
waste is thermally treated.
It should be noted that part of the aims of this Goal is to reduce fossil fuel use, which is covered in a number of sections in this report.
ACTION FOR 2022: Implement proper sustainable supply chain management and supply chain responsibility.