‘Technology and sustainability individually and independently led to the emergence of new economic and financial paradigms. However, when considering the intersection of these two driving forces, a new paradigm is also emerging, so-called sustainable digital finance. A critical issue for ESG agenda…
Sustainable digital finance is the result of the intersection between technology and sustainability. Sustainable digital finance identifies a financial paradigm. This paradigm implements a “technological ecosystem”. It pursues sustainability, which should be intended as “a strong, sustainable, balanced and inclusive growth”. This is achieved by directly and indirectly supporting the targets set in the Sustainable Development Goals.
Sustainable digital finance is strictly connected to “aspirations captured in the business community”. This includes not only sustainability but also “corporate social responsibility”. It also involves “multicapital or shared value” and the ESG agenda.
Similar to digital finance, sustainable digital finance relies on a technological ecosystem. Disruptive technologies operate with a high degree of complementarity in this ecosystem. These include mobile payments platforms, crowdfunding, and peer-to-peer lending. They also encompass finance-related big data, artificial intelligence, and machine learning. Additionally, blockchain, digital tokens, and the Internet of Things are part of this ecosystem.
Sustainable digital finance could leverage technologies effectively. It can provide a significant contribution toward environmental sustainability. This is in addition to other sustainable goals.
From the Book: Sustainable Finance in Europe: Corporate Governance, Financial Stability and Financial Markets
Editors: Danny Busch, Guido Ferrarini and Seraina Grünewald