By Olabisi Omotayo

In the pursuit of inclusive economic growth and stability, the integration of Environmental, Social, and Governance (ESG) principles has emerged as a pivotal strategy. ESG encompasses a spectrum of criteria that evaluate a company’s performance and societal impact, spanning environmental stewardship, social responsibility, and governance practices.

The adoption of ESG principles seeks to align financial objectives with ethical imperatives, driving long-term value creation while mitigating risks. This article delves into the significance of ESG frameworks in fostering sustainable financial inclusion, elucidating its multifaceted impact on global economic landscapes. We will be considering what some pioneer countries in promoting sustainability have done, how it has been working, and lessons that emerging and developed countries can draw from them. 

European countries like Denmark and Norway are rated the best for ESG. Denmark tops the list in sustainable development with a holistic approach that includes clean and efficient renewable energy production, water management, waste recycling, and green transportation including bicycling culture. She is rated the most ecofriendly country because of her respect for nature and clean energy. In the very middle of Denmark lies Samso Island, famous for its delicious potatoes. Since 2007, Samso has been 100 percent sustainable, relying entirely on renewable energy such as wind, solar, and biomass energy. Samso’s households replaced their oil-burning heaters and insulated their homes to meet that goal. Now the Island is implementing a new strategy for reusing all wastes.

Denmark is also one of the world’s most digitalized countries. Most transactions are cashless, and almost all interaction with Danish authorities takes place online from tax payment to reporting of bicycle theft. Each citizen has a unique digital signature to sign important documents. The Danish government has made a commitment to go “digital by default”, with paper used only as a last resort. Her high level of broadband penetration makes digital – only services practical and accessible; data security and privacy is a high priority; and financial transactions and other important services require “two – factor” identification to complete.

Financial inclusion in Denmark is significantly impacted by all of the above extraordinary and sustained efforts as 2017 G20 financial inclusion indicators prepared by Global Partnership for Financial Inclusion reveal that everyone including all females above 15 years had a bank account.

The rise of Fintechs, Payment Services Banks (PSB) and innovations in form of digital financial products has democratized financial services, offering tailored solutions for unbanked and underbanked populations in Nigeria. This has deepened financial inclusion and resulted in increased earnings for financial institutions. 

Omotayo, a Fellow of the Chartered Institute of Bankers of Nigeria, CIBN, is the Managing Partner of Bisken Consulting Services.