citizens’ spending is part of financing for sustainable development. People’s spending on goods and services is conventionally excluded from analyses of finance. Yet such expenditure, amounting to US$47 trillion globally in 2018, is a keystone in determining what gets produced and consumed and where investments go.
Digitalization provides new payment pathways for consumer spending, some 1.9 billion mobile subscribers have used mobile to purchase goods and services in 2018. Ecommerce reached US$3.5 trillion in 2019 and expected to grow to US$5 trillion by 2021, with fastest predicted growth in developing countries. Digitalization is also a game-changer for many small businesses, which can use ecommerce platforms such as Alibaba, Jumia, Mercado Libre and Amazon to overcome challenges of small, local markets and limited outreach capabilities. Moreover, digitalization has opened the way for a rapid growth in so-called ‘pay-as-you-go’ approaches to providing energy and other infrastructure-intensive utilities and public services.
Overview of this Catalytic Opportunity
Opportunities |
Shape consumption decisions through improved information and choice architecture. |
Scale |
Annual global consumption expenditure is US$47 trillion. |
SDGs |
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citizens as.. |
Consumers, asset owners. |
Use cases |
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Next steps |
Policy makers should work with industry and provide incentives to encourage and facilitate sustainable choices by consumers and enable digital markets for sustainable assets. |
Digitalization can play the role of influencing citizens’ consumption behaviour. Ant Group has experimented with this through its ‘Alipay Ant Forest’ platform that has attracted over 550 million Chinese users taking greater account of the carbon content of their consumption behaviour, now extended to a comparable experiment in the Philippines Building on this experience, Mastercard has announced a similar initiative, giving any Mastercard issuer the ability to let their cardholders monitor the carbon footprint of their purchases.
WEbank in China has created the “Measurable Ethics: Rating, Incentivization, Tracking & Supervision Framework” (MERITS) which aims to apply digital technologies to measure, record, and validate acts of positive social and environmental behaviour. It seeks to incentivise small but positive social and environmental behaviours. It sees MERITS being issued, earned, traded and redeemed for rewards in a system of social markets.
Next Steps: Policy makers should incentivise innovation and industry alliances that transparently facilitate and reward sustainable choices by consumers, create conditions for digital markets for fractionalized ownership and trading of sustainable assets.
