In the past few years, investors have become more conscientious in their financial undertakings, they invest more in funds and corporations that follow Environmental, Social, Governance (ESG) mandate and donate to charities, some even creatively donate their NFT. On the other hand, the COVID-19 pandemic has debilitated not only the economy but also social conditions – people feel lonelier and their mental wellness is draining.
These seemingly trivial signals illuminate the changing society and values. Change sounds formidable but as policymakers we must always ask the salient question: how do we look for opportunities among this stream of change, to create policies based upon and for sustainable development? The UNDP Strategy & Futures Team categorise these signals under the theme “value investing” which consists of the following sub-themes:
1. Rethinking the Governance of ESG
In these past few years, governments have become more invested in environmental issues as seen with the EU or the US Government’s Inflation Reduction Act (IRA) that creates new incentives for investors to invest in renewables and sustainability. In other words, Environment, Social, Governance (ESG) has become a mandate that businesses follow to attract investors. 81% of financial institutions in the US have a plan to increase ESG funds within two years.
However, there has been some backlash against ESG. The government of Florida withdrew their investment in BlackRock Inc, an ESG-aligned business, stating that the investment could negatively affect the state’s energy sector. Plus, without a standardised measure for ESG-aligned business, investors cannot assess the situation and be assured of their investment.
These signals show us how people have become more interested in ESG and how there is a need for standardised indicators. Development of clear, verifiable, standardised metrics is important, along with the effective communication about the real values of ESG. This will create confidence among investors and the growth of ESG.
2. The Changing Face of Altruism
People are now donating in the form of non-fungible tokens (NFTs), as seen with the donations to Ukraine or other disaster areas. Technology has created a new way for people to donate. Oxfam trials blockchain platform triggers donations when donors’ conditions are met e.g. when there is a natural disaster, the system will automatically donate to related relief organisations without the donors having to search for trustworthy organisations themselves.
The World Happiness Report found that the number of donors has increased even before the pandemic. Patagonia started to donate to organisations working on addressing climate change. A group of investors called “Effective Altruists” donated $600 million for long-termist public healthcare development.
These signals show that charity has changed, not only in terms of technology, but also the surging interest in matters that are long-lasting and can devastate the future generations.
There have been concerns about the new form of donation, the NFT market can fluctuate and some donors may have not yet realised the importance of long-termist donation. But as policymakers, we can always turn concerns into opportunity and ask the questions of how. How can we optimise blockchain to attract new donors? How can we communicate to the public that long-termist donation is a way of attaining the “common future”?
3. Why Aren’t We Talking About a Social Recession?
The pandemic has wreaked havoc on the economic and social conditions. Statistica found that 33% of adults worldwide experienced feelings of loneliness. UNDP found that 35% of the younger generations experienced burnt-out and distress at the workplace. One in eight people worldwide suffer from mental health issues.
A UN Women report found that most women work in the informal sector such as the care work industry without paid leave or other employment benefits. It was also found that one in six LGBTQI+ persons in Thailand has contemplated suicide due the stigmatisation they face.
These signals show how we have been paying more attention to economic matters but have been dismissive of social regression such as mental wellbeing, working conditions, and gender equality.
All of these matters, mental health, sex and gender-based discrimination at work or even on the way home, reveal the urgent needs to rebuild people’s sense of trust and community. The investment for mental wellbeing and gender equality is part and parcel of the attainment of SDGs.
4. The Looming Jobs Crisis
Several countries are on the verge of labour shortage – they are becoming ageing societies or they are affected by the pandemic-stricken global supply chain. In the US, 4.3 million people have resigned, breaking the greatest resignation record from twenty-three years ago. The Great Resignation did not happen because workers exceeded job positions but rather because people did not want to go back to the same old working conditions as pre-Covid and some chose to retire early. Labour policies have also created the jobs crisis. The new UK’s policy on employing overseas workers has reduced the number of migrant workers in agriculture and transportation sectors, resulting in hoarding and surging prices of consumer goods.
On the other hand, sub-Saharan Africa will experience the youth bulge where the working-age population will increase by 20 million a year up until 2050. However, the younger Africans are optimistic about their future work opportunities and quality of life.
These signals are contextual but they point towards changes in workforce and working conditions after the pandemic, which is a point of concern for the future.
How do we respond timely to emerging situations? Governments need to look for new ways to invest in human development and attract employees to stay in the workforce. Even the optimism of the sub-Saharan African youths needs to be taken into account on how to optimise their optimism, and create economic and labour policies that genuinely respond to their needs.