On January 1st, 2024, the new Corporate Sustainability Reporting Directive (CSRD) from the European Union (EU) came into effect, which means many European companies will be required to report on their ESG efforts with a level of detail that surpasses anything we have seen before. While there is a phased introduction, this applies to large and publicly listed SMEs, including financial companies, which must report according to mandatory standards set by the EU.
That’s a good thing because solid data is a necessary tool if ESG work is truly going to move from a ‘nice to have’ to a ‘must have’ item on the boardroom agenda. However, Plenty of ESG issues are crucial to both businesses and the well-being of society at large but are also more complex and not easily captured in Excel sheets in the same way as, for example, energy consumption or employee training.
One example is access to financial systems and services globally. International money transfers are complex, especially in countries where traditional banking infrastructure does not reach every corner. The World Bank has estimated that 1.4 billion people today lack real access to a bank and thus basic financial services such as the ability to send and receive money. Furthermore, countries in conflict zones are often cut off from access to international payment systems. This can have significant humanitarian consequences and cause serious issues for NGOs and international charities.
The transfer of funds for emergency aid can take weeks to reach their destination provided they don’t get lost through an intermediary along the way. It is also difficult to trace the path of the money to the recipient, and transfers are often associated with high fees when using traditional payment infrastructures.
For NGOs or international charities that need to send money for emergency relief, development assistance, or salaries to local employees, the slow speed and high costs pose real problems. The speed at which assistance arrives can be critical in emergencies.
At Inpay, we have built an extensive global network of local financial institutions which means that we can handle international money transfers faster, more securely, and at lower costs than regular banking providers.
This creates new opportunities to support the work of NGOs and aid organizations in every corner of the world. They have a complete overview of the path of the money to the recipient, and we at Inpay are on hand with advice and guidance along the way. Ultimately, this means that more help reaches people who need it.
This business solution promotes the financial inclusion of societies that are otherwise cut off from the global economy and can maybe even help eradicate global poverty – the UN’s Sustainable Development Goal No. 1.
Although the metrics surrounding social issues can be hard to quantify, does this mean that we should stop collaborating with aid organizations? No, of course not. On the contrary, we in the financial sector should commit to thinking more deeply about how our business models fundamentally impact people and the planet we live on, irrespective of whether the results can be formalized and put into audit-friendly spreadsheets. ESG needs to be deeply rooted in business if it is to have a chance of creating real and lasting changes for society.