Imagine earning just $1.90 a day to cater for all your needs: feeding, shelter, clothing, being just the basics. That’s what the World Bank (October 2021) estimates as the living condition of over 736million people who are living in extreme poverty. Additionally, they project between 68-132millionmore people will be driven into poverty due to the devastating effects of climate change. This gives us all something to think about on focusing on ESG (Environment / Social / Governance).
But what does poverty really mean? We can refer to it as a state or condition where a person or community lack sufficient resources (economic, financial, etc.) that is essential for a minimum standard of living. The absence of a source of empowerment to address basic human needs like food, water, sleep come as unaffordable luxuries to many people living across the world, taking away the choice of what needs they would like to be met from them. The devastating effects of the Covid-19 pandemic as worsened the precarious balance on the thin line of poverty, putting a tighter strain on the resources of national economies, impacting their ability to continue to provide poverty alleviating measures. With the near absence of social protection measures, the rise in extreme poverty rates over the next few years is imminent. The United Nation sites a widening gap in poverty levels that is disproportionately skewed unfavourably towards women, while statistic suggests that 3.2 million children under the age of 5 die each year in sub-Saharan Africa from poverty’s devastating effects. Does all this spell doom?
Over the years, driving the focus on ESG has been on the increase. While regions tend to place emphasis on the areas of critical need, one area that has been the center of attention for the emerging markets is driving Social interests. At the World Economic Forum 2021 – The Great Reset, a call was made on global leaders to chart the path for “Recovery Together”, with the need for higher Public – Private co-operation, more social interventions and the need to leverage digitization all to access the most vulnerable.
Economic empowerment through enabling channels for the flow of investment has been an area identified for driving social inclusion. Interestingly, recent trends have shown investment patterns following this pattern. As the corporate world continues to improve on making their operations more sustainable and social entrepreneurs ensuring their ventures achieve its triple-bottom-line, activity has grown in the impact investing industry. More professional investors around the world are embracing taking the investment risk to create portfolios in emerging markets. Building the bridges to accelerate access and investing into the ventures that are driving sustainability in emerging markets could be one major step in stemming the tide of gloom driven by poverty.
Join us at ImpactVest Connect this week in commemorating the International Day for the Eradication of Poverty and let's imagine new ideas to reduce poverty and have a lasting impact in more communities!