> Posted by Holly Padgett
As a former student of Environmental Science and a strong advocate for environmental (as well as economic and social) sustainability, I am constantly striving to align my work and experiences with the precepts of sustainable development, defined by the UN World Commission on Environment and Development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
While I, and probably many others, would argue that microfinance and financial inclusion are undeniably a part of sustainable development, it is often hard to see the direct connection. For this reason, it is especially exciting when I run across an event or report that directly exemplifies the link.
For example, in the recent climate negotiations at the 2011 UN Climate Change Conference, in Durban, South Africa, several initiatives were agreed upon that support the triple bottom line (economy, society and environment) in developed and developing countries. One major decision that came out of the summit was the establishment of the Green Climate Fund, which will channel money from developed nations to developing and vulnerable communities to assist with clean energy programs and adaptations to climate change and extreme weather events.
Another example is a report recently published by CFI, “Microfinance and Energy Poverty,” that discusses the role of MFIs and savings groups in bringing affordable, renewable energy devices to off-grid populations in Africa. The NewEurope Post, a European newspaper, also recently put out an article that stresses the importance of microfinance in supporting cheaper and environmentally friendly energy solutions (e.g., solar hot water heaters, housing insulation, and small-scale solar panel systems).
In 1987, the UN commission put forth two concepts that further define sustainable development: 1) “the concept of ‘needs’, in particular the essential needs of the world’s poor, to which overriding priority should be given” and 2) “the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.”
I often return to this definition for motivation and inspiration. I love that the examples above clearly show efforts to address the needs of developing communities while also considering the environmental impacts of such initiatives. I hope to hear from anyone who has more examples of this connection!
Image credit: Landlogics
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December 21, 2011 at 9:05 pm
alexcountshaitibook
Excellent post. I enjoyed it. To reinfoce the point: There are lots of initiatives related to clean energy, sustainable development and microfinance these days. Arc Finance and MicroEnergy Credits are doing terrific work and also, my chapter in “New Pathways out of Poverty” covers a lot of ground in this space.
January 3, 2012 at 1:43 pm
Holly Padgett
Alex – Thank you for your message. These suggestions look really interesting. I look forward to learning more about them.
December 23, 2011 at 11:24 am
per s
Hi, I am all for us practitioners and donors supporting linkages between mf and small scale cleantech solutions. But I am also a bit bothered by the fact that many mf clients (be it commercial or non-commercial schemes) are in fact using loans or converting savings into undeniably environmentally problemematic investments. Among others: artisanal goldmining, tanneries, small-scale metal workshops, brickmaking, toxic farming inputs etc. All deemed among the worst offenders in the micro context. (not to mention often unhealthy). Yes, on the other hand who are we to say that poor must live in complete harmony with nature – when we clearly more than ever are not. But there is often a trade off that we seldom talk about – and if we are to now also launch microfinance as actually promoting environmentalism…then there is some work to be done by all of us to think about the not so environmentally friendly parts in microfinance (and I do include savigns-groups in this)
I like the post though…
January 3, 2012 at 1:50 pm
Holly Padgett
Thank you for this informative message. I agree that the idea of connecting microfinance with environmental sustainability is a very complicated subject with no easy solutions. I do hope though that it is an area that MFIs and savings-groups are giving some attention to (and, of course, being responsible about).
January 11, 2012 at 3:41 am
Magdaleno T. Bargamento
Thank you for the efforts in integrating environment, microfinance and social bottom line. Every day, whatever we do wherever we are our move affects negatively or positively the environment. With the huge number of intended target in microfinance industry, we can save the biosphere and change the world meeting present needs without sacrificing the needs of the future generation. I hope at least 50% of microfinance institutions worldwide institutionalize the triple bottom line.
Magdaleno T. Bargamento
January 13, 2015 at 11:20 pm
Marjorie
Very interesting post,
Im actually interested in this connection myself but the more I learn about micro loans, less I believe it is doing much good for environmental efforts or anything for that matter. The social harms for women and communities often outweigh these benefits. We cant expect to sustain the triple bottom line if we dont work out the social part of it as much as the economic and environmental. Especially if conditions for women in the face of these loans is neither bearable nor equitable. If we want to reach these “UN Development Goals” there needs to be more transparency with these sorts of loan programs. Not only that but there should be other avenues to advance sustainability projects without reinforcing the cycle of poverty.