A failing grade

By most accounts, we are failing this generation. In the years leading up to the pandemic, feelings of persistent sadness and hopelessness – as well as suicidal thoughts and behaviors increased dramatically among young people. The Centers of Disease Control and Prevention’s Youth Risk Behavior Surveillance System puts in this number at about 40% among youngsters in the United States. The situation isn’t much better elsewhere around the world.

A Gallup-WWF study said that compared with older generations, Gen Z-ers are much more likely to report experiencing negative emotions such a stress, anxiety and loneliness. Social media pressure, military conflicts, natural disasters, climate change, crushing debt, economic insecurity, lack of community and connection – all play central roles in contributing to this worrying statistic and the ensuing mental health crisis.

As adults responsible for the next generation, we’ve been asleep at the wheel. The comforting delusion that we can continue with ‘business as usual’ is wreaking havoc on the lives and futures of these Gen Z-ers.

They live in bigger houses but empty homes. They have lightning fast 5G internet connectivity but have to contend with a deep void of human connection. We’ve got them overly concerned about GPA’s and college entrance tests while we breezily brush aside their concern for the state of the planet they live on. We tell them they are the leaders of tomorrow while providing poor examples of true leadership today.

Sins of omission

Our sins of omission might overshadow those of commission – our deafening silence in the face of injustice, our numbing apathy at the violence against the powerless, our blatant disregard for the pleas of the vulnerable.

We’re promoting toxic traits – favoring independence over interdependence, which is shown to be a mark of maturity; individualism, instead of collectivism where everyone benefits; and isolation rather than embracing community, which provides the crucial social and psychological support they need to thrive.

Care, compassion and courage

While none of this wasn’t intentional, the ongoing impact is undeniable. If we want Gen Z-ers to have a fighting chance at happiness and fulfillment, we need to re-assess our values and priorities. We need to change the way we view the world, not just how we can get the most out of it, but how we can all actively contribute to a better world. Not just mindless consumption at the expense of the poor and the planet, but mindful utilization and fair distribution of resources. Not just what’s best for us individually, but what’s best for society as a whole.

We need to re-examine and repair our social fabric. We need to show care, compassion and courage for those less fortunate. We need to realize how interconnected our lives and paths are.

A paradigm shift

Until we can make this shift in our thinking, our current efforts at tackling the youth mental-health crisis, which primarily center around medication and individual therapy, will be incomplete, ineffective and woefully short-sighted. It’s high time we take a more holistic view and demonstrate the stewardship required from us.

Undoubtedly, this transition won’t be easy, given that we’ve been entrenched in this way of thinking for so long. It’s so much easier to prescribe quick fixes rather than to re-evaluate the very foundations we’ve built our lives on. But this is now a moral imperative – the future of Gen Z hangs in the balance.

Nowhere is that more apparent than in the fight for climate action. With COP28 now underway in the UAE, the widening divide between the Global North and Global South has finally taken center stage, with pledges, finance and action plans to address this concern with the seriousness and consideration it deserves.

On the first day of this year’s UN climate conference, delegates agreed to launch and capitalize the Critical Loss and Damage Fund which would provide financial assistance for vulnerable countries to deal with the worst impacts of climate change. This is a significant step in the right direction for two reasons. One, that climate change is likely to hurt poor countries more than rich ones, and two, that the countries hardest hit by the climate crisis have done the least to cause it.

It’s the economy, stupid

Climate change not only impacts the physical face of these countries, it also has a huge impact on their economies, thus further increasing economic inequality around the world. While climate change is just one of the factors, the price of this rising economic inequality is steep.

Beyond the stark disparity in wealth distribution, the escalating price of this inequality is revealed many other ways. An eroding social cohesion, diminishing opportunities for those on the lower rungs of the economic ladder, a widening heath gap, an increasing education gap, and barriers to social mobility, are some of them. The impact of these repercussions reverberates through various facets of society, impacting individuals, communities, and the overall well-being of nations.

A long, winding road ahead

It’s crucial then, to consider ways in which we can tackle this growing economic inequality and thus bring a measure of social justice. Whilst the problem is complex, multi-factorial and seemingly intractable, there are strategies we can deploy that will help. We do however need to rid ourselves of any delusions that this is going to be easy, or quick.

Economic inequality is a systemic problem and changing deep-rooted systems are never easy, especially when those very systems benefit a powerful section of society.

Low hanging fruit

Financial empowerment holds significant promise in this context, and given its intricate entwinement with social justice, it serves as a catalyst for positive change. This emerges as a potent force capable of reshaping the landscape of social justice within our communities. This not only addresses economic balances but delves into the border narratives of societal well-being and inclusivity.

Financial empowerment offers individuals the tools and knowledge to navigate and harness financial resources. This is pivotal step in dismantling systemic barriers that perpetuate inequalities, paving the way for a more just and inclusive society.

It also intersects with other aspects in inequality, such as gender and race. Women and minorities have historically faced significant challenges in accessing financial resources and opportunities. By giving them skills, understanding and confidence to manage money better, we can help create a bridge these divides.

One of the big advantages of financial empowerment is that it has wider social implications. When individuals have a strong understanding of financial concepts, they are better equipped to navigate complex financial systems and make informed choices. This, in turn, can contribute to economic growth and stability at both the individual and community levels. It can also help reduce income inequality by providing individuals with the tools they need to build wealth and create a more secure future.

An intense, concerted effort to financially empower individuals needs to get underway, one that deploys and leverages the resources of various stakeholders. Such an initiative would make great strides in restraining the growth of inequality, for the reasons mentioned above.

An existential crisis

In times of economic and financial stress, environmental concerns often go out the window. Our instinct for immediate self-preservation edges out our concern for the common good, even though this strategy is counter-productive in the long run. Human beings and most other species cannot survive and thrive in a massively depleted and damaged environment. However, our psychological make-up prevents us from realizing this. We tend to suffer from ‘tunnel vision’, focusing intensely on the most immediate crisis while blocking out considerations of the future.

Helping individuals develop financially security will help give them the mental bandwidth they require to focus on the existential crisis just around the corner – climate change and its potentially devastating impact on our planet. This will empower them to make informed choices regarding green alternatives – be in in energy, investments or food choices; and strengthen their resolve and ability to turn away from cheaper but dirtier and more polluting alternatives. Being financially savvy will also help individuals become more discerning and thus help to stem the tide of blind consumerism threatening to engulf us all.

In summary, financial empowering individuals has immense benefits, not just for them individually but for society, and the entire planet. It’s a concrete step toward a more equitable, resilient and sustainable future and a huge stride toward the ideal of social justice that we all crave and require.

Promises in Peril

The current status of these SDGs however, is less than promising.  According to the 2023 SDG Report, only 15% of the Sustainable Development Goals are on track to be achieved by 2030. Nearly half, 48%, show moderate or severe deviation from the desired trajectory, while over one-third, 37%, have experienced no progress or have regressed below the 2015 baseline.

Factors such as a weak global economy, the impacts of the climate crisis, and the lingering effects of the COVID-19 pandemic have impeded progress toward these goals. To reverse this trend and fulfill these promises, our actions must align with the scope of these challenges.

Unlocking Potential

In a world where financial decisions reverberate through every aspect of our lives, the transformative power of financial literacy cannot be overstated. A scalable initiative that empowers people with the financial literacy skills they need to make better financial decisions, has the potential to address not one or two but five SDGs.

SDGs 3, 4, 5, 10 and 17 form the nexus of positive change and it’s through the lens of financial literacy that we can truly unlock their potential.

Goal 3: Good Health and Well-being

The impact of financial stress on health – both physical and mental – is well known and documented. Financial stress has been linked to a range of mental health issues, including anxiety and depression. Numerous studies have established a direct correlation between financial stress and adverse physical health outcomes, ranging from cardiovascular issues to gastrointestinal problems. The physiological response to financial stress, characterized by elevated levels of stress hormones like cortisol, can contribute to inflammation, weakened immune function, and disruptions in sleep patterns.

Financial literacy enables individuals to manage their money better and make better financial decisions. It helps them avoid major financial mistakes and feel more secure and confident about their future. This in turn leads to decreased financial stress and better physical and mental health outcomes thus directly addressing SDG 3.

Goal 4: Quality Education

 Quality education continues to be an elusive goal for many, with a lack of effective learning outcomes, scholarships and qualified teachers rating high on the problem scale.

A well-designed financial literacy initiative has the ability to address this SDG head on particularly if it focuses on a number of key aspects – that is delivered by qualified teachers who are specially trained to deliver high impact programs, that it is offered free of charge to students by securing sponsorships with banks and other corporate institutions, and that there are effective learning outcomes as evidenced by independent reviews and case studies.

Goal 5: Gender Equality

Despite significant strides, gender disparities persist globally, particularly in economic empowerment. A financial literacy initiative plays an important role in dismantling barriers to gender equality.

By providing women with financial knowledge and skills, we empower them to make independent financial decisions, navigate economic systems, and participate fully in economic activities. Financially literate women are better positioned to break free from economic dependence, challenge gender stereotypes, and contribute actively to economic development. Moreover, financial literacy programs can address the unique financial challenges that women face, such as the gender pay gap and access to financial services.

Goal 10: Reduced Inequalities

The rise in economic inequalities poses a significant challenge to global development. The perpetuation of economic inequality often results in a cycle where certain groups face systemic barriers to wealth accumulation, hindering their ability to break free from the constraints of poverty.

A financial literacy emerges as a powerful tool for reducing inequalities by providing individuals from all backgrounds with the knowledge and skills to navigate financial systems. Financially literate individuals can make informed decisions about budgeting, investing, and managing debt, contributing to improved financial well-being. Financial literacy is particularly impactful in marginalized communities, where it can serve as a means of empowerment, breaking cycles of poverty and fostering economic resilience. By promoting financial education as a tool for social and economic inclusion, SDG 10 can be advanced, leading to a more equitable global society.

Goal 17: Partnership for the goals

Increasing cooperation is seen as vital to achieving each of the 16 SDGs.

A financial literacy initiative that’s pinned on the collaborative efforts of various stakeholders like educational institutions, financial institutions, government bodies and other corporate entities perfectly aligns with the spirit of SDG 17.  It leverages the expertise and resources of various stakeholders and increases the sustainability of the initiative.

Fin-Ed UNITED 2023

This nationwide financial literacy initiative led by KFI GLOBAL aims to foster financial literacy through a scalable, standardized, and sustainable approach. By empowering individuals with financial knowledge and skills, it not only enhances individual well-being but also contributes significantly to the broader agenda of sustainable development.

In steering us toward a future where economic empowerment is a catalyst for social and environmental goals, Fin-Ed UNITED 2023 stands as a groundbreaking initiative on the path to positive change.

The integration of these ESG factors into an organization’s operations and strategy has become increasingly vital for long-term success and sustainability. While all three pillars of ESG are important and interconnected, the social dimension is often not given the attention and importance it deserves.

Understanding why the social aspect is essential and why it’s critical to incorporate this into an organizations’ vision and strategy will help unlock immense value and opportunity.

Enhancing Stakeholder Relationships

The social dimension of ESG revolves around engaging with and positively impacting various stakeholders, including employees, customers, communities, and society at large. By prioritizing social considerations, organizations can foster stronger relationships with their stakeholders, thereby increasing trust, loyalty, and goodwill. Satisfied and engaged stakeholders are more likely to support the organization, advocate for its products or services, and contribute to its long-term success.

Managing Reputation and Brand Image

In an era of heightened transparency and interconnectedness, an organization’s reputation and brand image are of paramount importance. The social dimension of ESG enables organizations to build a positive reputation by demonstrating ethical behavior, social responsibility, and a commitment to societal well-being. By actively addressing social issues, promoting diversity and inclusion, supporting community initiatives, and championing human rights, organizations can differentiate themselves from competitors, attract customers and investors, and build a strong and respected brand.

Attracting and Retaining Talent:

The social dimension of ESG plays a significant role in attracting and retaining top talent. Today’s workforce seeks purpose-driven organizations that prioritize social responsibility and demonstrate a genuine commitment to creating a positive impact. Organizations that prioritize social considerations are better positioned to attract, engage, and retain talented employees who are motivated to contribute to a greater cause. Moreover, organizations that foster inclusive and diverse workplaces through social initiatives benefit from enhanced innovation, creativity, and overall employee satisfaction.

 Meeting Stakeholder Expectations and Compliance

Stakeholders, including customers, employees, investors, and regulators, are increasingly demanding that organizations address social issues responsibly. Failure to meet these expectations can result in reputational damage, loss of market share, regulatory scrutiny, and financial implications. By embracing the social dimension of ESG, organizations can align their strategies with stakeholder expectations, demonstrate a commitment to social progress, and ensure compliance with evolving societal norms and regulations.

Unlocking Business Opportunities

The social dimension of ESG presents organizations with a multitude of business opportunities. By embracing social responsibility, organizations can tap into emerging markets, develop innovative products and services that address social needs, and access new sources of financing, such as impact investment and sustainable funding. Additionally, organizations that actively contribute to social progress can benefit from enhanced customer loyalty, increased market share, and a competitive advantage over less socially responsible competitors.

A financial literacy initiative

At KFI GLOBAL, we recognize the power of financial literacy in creating a positive social impact. Our collaborative efforts with stakeholders, including educational institutions, authorities, and financial institutions, aim to develop financial literacy programs for young people in the UAE. This initiative aligns with the ESG objectives of sponsoring organizations, providing scale, standards, and sustainability to their ESG initiatives while building trust and creating meaningful social impact.

Conclusion

The social dimension of ESG is an integral component for organizations seeking long-term success, trust, and impact. By prioritizing social considerations, organizations can strengthen stakeholder relationships, manage reputation, attract talent, meet expectations, and seize new business opportunities. Embracing social responsibility not only benefits organizations but also contributes to a more sustainable and prosperous society.

Given the looming economic crisis, the dizzying pace of technological advancement and the rapidly shifting social norms, their success of Gen Z will be hard-fought. Gen Z isn’t shying away from any of this and is frequently lauded for being innovative, entrepreneurial and open-minded.

However, there is one skill they are lacking: financial literacy. Through no fault of their own, as it’s not part of the current education system, their ignorance of this subject risks derailing their future. It’s a risk that needs to be addressed urgently, given the massive downside. Teaching Gen Z how to how to budget properly is a key part of what financial literacy entails, but the benefits of financial literacy go far beyond showing them how to deftly balance their paycheck with their love of avocado toast and creamy lattes.

Financial Inclusion

Financial inclusion refers to the ability of individuals to access and use financial services and products that meet their needs and are affordable. Financial literacy plays a crucial role in helping these youngsters understand and navigate the financial system, which can seem quite daunting to the uninitiated. With the proliferation of digital payment systems, online banking, and cryptocurrency, young people face more difficulty navigating the world of finance. This can be particularly important for those who have historically been excluded from the financial system, such as low-income individuals, women, and minorities.

Financial literacy can prevent youngsters from taking on excessive debt or falling victim to predatory lending practices, which can lead to financial exclusion. It gives Gen Z the competence and the confidence to access and use the most appropriate financial services and products like savings accounts, loans, and insurance.

Financial Scams

There has been a sharp spike in financial scams in recent times. These scams are becoming more sophisticated and difficult to detect and can take many forms, including phishing emails, phone scams, bank impersonations and fraudulent investment schemes.

Latest statistics from the UK’s Financial Conduct Authority show that there has been an increase of 193% over the past five years in the number of calls from investors reporting suspicious investment opportunities.

One of the most effective ways to combat financial scams is through financial literacy. By educating Gen Z on the warning signs of a scam and the steps they can take to protect themselves, financial literacy can help them from falling victim to these schemes. This may include teaching them how to identify phishing emails, how to verify the legitimacy of an investment opportunity, and how to protect their personal and financial information online.

With the widespread access to various financial and investment products available to anyone with a phone and internet connection, educating youngsters on the inherent dangers becomes even more critical.

The Gig Economy

The gig economy, also known as the sharing economy, is characterized by short-term contracts or freelance work. It has exploded in popularity over the past decade, driven in part by technological advancements, and Gen Z is more likely to embrace the gig economy than any generation before them.

This is particularly due the characteristics of Gen Z alluded to in the start of the article, namely: being innovative, entrepreneurial and open-minded. According to a survey by Upwork, 61% of Gen Z workers have freelanced in the past year, compared to 47% of all workers.

They revel in the flexible work schedules which enables them to balance work and other aspects of their lives; the opportunities for skill development and entrepreneurship, and in the ability to earn a steady income while exploring various career options.

There are, however, some challenges associated with the gig economy, the biggest one being the lack of financial stability that comes with irregular and unpredictable income streams. Financial literacy thus becomes an essential tool for Gen Z’s success in the job market. These youngsters must be able to properly manage their finances and plan for their future. By understanding the fundamentals of budgeting, saving for retirement and investing, Gen Z can position themselves for long-term stability and success.

Social Sustainability

Financial literacy also has broader societal implications that are critical for Gen Z. By empowering young people to take control of their finances, we can help reduce economic inequality and build a more sustainable society, one this is less financially fragile and more financially resilient. This is particularly important in light of the COVID-19 pandemic, which has exacerbated existing economic disparities.

According to the World Bank, social sustainability involves creating more inclusive societies, enhancing the empowerment of citizens, and fostering more resilient communities. Financial literacy has an indisputable role to play in all of these aspects.

A Vital Tool

Financial literacy is a vital tool for the success of Gen Z. Faced with a deepening economic crisis and financial insecurity, it can help Gen Z effectively navigate the complex financial system by promote financial inclusion, educating them about financial scams and preparing them for the gig economy.

By empowering young people to take control of their finances, financial literacy can enhance the empowerment of citizens and foster socially sustainable communities. It’s time to prioritize financial literacy and give Gen Z the tools they need for success.

The Paris Agreement laid it out clearly: to limit global warming to 1.5°C, greenhouse gas emissions must peak before 2025 at the latest and decline 43% by 2030. Otherwise we will need to contend with higher sea levels, fiercer storms, animal and plant extinctions, melting ice, wildfires, and more people dying from heat, smog and infectious diseases. An existential crisis is in the making.

While some progress is being made, it’s not nearly enough. We need to use every tool in our arsenal to combat this looming climate catastrophe. Financial literacy is one often-overlooked tool in this regard.

Whilst the link between financial literacy and climate change isn’t immediately obvious, a closer look reveals important connections and correlations that could help us leverage this tool.

Conscious Consumption

Financial decisions like the purchases we make have a significant impact on the environment. For example, the types of products we buy and the way we consume resources can contribute to greenhouse gas emissions and other kinds of pollution. Financial literacy can help people make conscious consumption decisions about the products they buy and the resources they consume, leading to more sustainable living practices.

Research has shown that individuals with higher levels of financial literacy are more likely to make environmentally conscious financial decisions, such as purchasing energy-efficient products, and reducing their carbon footprint. However, without financial literacy, individuals may find it challenging to understand the financial implications of their environmental decisions, limiting their ability to make informed choices.

Sustainable Living

Financial literacy can also play an important role in promoting sustainable living. A report by the Organisation for Economic Co-operation and Development (OECD) found that individuals with low levels of financial literacy were less likely to have insurance or emergency savings, leaving them financially fragile and thus more vulnerable to the financial impacts of climate change. Low-income and marginalized groups are especially at risk here.

By educating people on personal finance, insurance and budgeting, they can make informed decisions that lead to sustainable lifestyle choices. This includes everything from choosing appropriate financial products, using public transportation, and reducing energy consumption.

Green Investments

Green investments have become an essential aspect of investment and financial planning. However, having a good understanding of financial literacy is a prerequisite to making any investment decisions.

It’s crucial to have a clear understanding of how to calculate returns, determine risks, and create a balanced portfolio. This knowledge helps in making informed decisions regarding green investments.

Green investments can provide financial benefits while also making a positive impact on the environment. These investments include renewable energy technologies, green infrastructure, eco-friendly technologies, and sustainable agriculture. By investing in these companies, we can play an active role in reducing carbon emissions and promoting a sustainable future.

Financial Wellbeing

There’s a reason airlines ask us to put on our own oxygen masks before helping anyone else. This is because helping others is way more effective when our own survival isn’t in question.

People who are struggling to make ends meet, or pay off debt may not have luxury of focusing their attention on long term environmental goals, no matter how great the existential threat. They are forced to prioritize immediate financial concerns and focus on their day to day survival.

In their provocative book Scarcity, Sendhil Mullainathan and Eldar Shafir say that in the context of money, ‘Scarcity diminishes mental bandwidth, making us less insightful, less forward thinking, less controlled.’ This reduced bandwidth they argue is the reason for poor financial decisions. And it’s not a big leap of logic to see how a feeling of scarcity can adversely affect environmental decisions as well.

Financial literacy can help build financial resilience which translates into a sense of financial security and wellbeing. This enables people to engage in a wider perspective and make environmentally-conscious decisions.

The Missing Link

 Financial literacy helps individuals develop conscious consumption habits and sustainable living practices. It also helps garner interest in green investments and gives individuals a sense of financial wellbeing that allows them to create a sustainable future and be better world citizens.

Understanding how the issues of financial literacy and climate change are intertwined not only allows us to make meaningful progress on both but also allows us to see the bigger picture of how our financial decisions impact the environment and how financial literacy can be the missing link in our fight against climate change.

This ability to cooperate and work together for the common good is even more critical today as the human race faces an existential crisis: climate change, war, environmental degradation, resource depletion, and rising social inequality. These are all complex, convoluted problems that threaten the very survival of our species, problems that we cannot hope to solve without engaging all relevant stakeholders and leveraging all available resources and expertise to build a socially sustainable future.

A socially sustainable future is one that ensures the well-being of current and future generations by addressing social challenges such a poverty, inequality and exclusion and one in which all members of society have access to basic needs, resources and opportunities. While this might seem like an unachievable utopia, we can and must use a powerful weapon in our arsenal to bring this to fruition – partnerships.

Partnering for Impact

When done right, partnerships can achieve outcomes that are far greater than the sum of their parts – outcomes that neither party could have accomplished alone. In his seminal book Doing Good Better, William MacAskill sets out key concepts and metrics that can be used to explore and evaluate partnerships and the social issues they tackle.

At KFI GLOBAL, we strongly believe that financial literacy correlates strongly with the alleviation of poverty, inequality and financial exclusion – the very definition of social sustainability.

We partner with corporate entities to drive social sustainability thorough a financial literacy initiative for the younger generation. MacAskill’s key metrics help our partners devaluate and decide whether we are the right fit for them in their quest for social sustainability.

Scale: Here it’s important to consider the size of the problem and how much it affects people’s lives in the short run and long run.

Financial literacy for youngsters rates high on this scale and is a massive problem affecting almost all young people, as this particular skill isn’t addressed by the current education system. Knowledge of this skill impacts every aspect of their lives – from the jobs they take and the career path they choose, to how much they save, where they invest, and when they retire, to name a few.

A lack of this crucial skill causes the poor financial decisions and behaviors such as insufficient saving, impulsive spending, overuse of credit cards and being ill-prepared for retirement – obviously impacting their lives both in the short and long run.

Neglectedness: This analyses how many resources are already being dedicated to tackling this problem? How well allocated are the resources that are currently being dedicated to the problem?

The issue of financial literacy for young people rates high on the metric of neglectedness. Not many entities or resources are dedicated to tackling this problem. Schools don’t teach this. Even in countries like the UK, where teaching financial literacy is mandated by the government, schools are failing to do so because of a lack of teaching resources and training. Most parents are also not equipped to teach this to their children. A number of fintech and other financial institutions have forayed into this space, but this is not their primary raison d’etre, and so is usually a thinly disguised marketing activity. There is also then the issue of conflict of interest, and most parents and schools balk at the idea of financial institutions coming into schools to teach students about money.

Tractability: This is about how easy is it to make progress on this problem? Do interventions exist to make progress within this cause, and how strong is the evidence behind those interventions? Do you expect to be able to discover promising new avenues for progress?

Financial literacy rates high on this metric. It’s fairly easy to make progress on this issue and there is a ton of evidence to support the effectiveness of the right kind of financial education programs. Students who take a course in financial literacy are more likely to save, less likely to be compulsive buyers and less likely to max out their credit cards. A study by the World Bank found that countries with high levels of financial literacy have higher levels of savings, investment, financial stability and economic growth,

Through intense and engaging workshops facilitated by trained experts who educate youngsters on the basics of financial education, KFI GLOBAL is able to gain considerable traction on this thorny issue. The 5 R’s framework that we’ve developed and use in all our instruction, ensures that these youngsters are equipped with the confidence and competence to make intelligent financial choices. Our multi-award-winning programs, as well as the feedback and reviews of our interventions, are a testament to the progress we consistently make.

Company Fit: Here it’s important to examine how likely the company is to make a large difference in this area, given the skills, resources, knowledge and connections it possesses.

KFI GLOBAL has been working exclusively in the financial education space for the last 5 years. We are widely regarded as experts in the field, not just because of what we teach but also because of how we teach it. We’ve won a number of awards that attest to the quality of the content as well as the delivery of the financial education program. Perhaps most telling though is how KFI GLOBAL leverages its connections with educational and corporate entities to bring about massive impact in a way that’s innovative, standardized and scalable.

A socially sustainable future

We need to redouble our efforts to build powerful, synergistic partnerships that definitively impact the pressing social issues of our time. These metrics of scale, neglectedness, traction and company fit, help companies choose which social issue to commit to, and which organization to work with to bring about this much desired change.

It’s only by drawing on this superpower of collaboration that we can hope to build a better world.

Yet, one-third of the global population lacks this knowledge and understanding, and many live paycheck to paycheck, steeped in debt, and unprepared for retirement. This is largely the norm for a large chunk of the population. These individuals are less likely to save, more likely to make impulsive purchases, and more likely to max out their credit cards. The consequences of these actions are not limited to the individual or their family, but they also affect communities and the nation at large.

According to the World Bank, social sustainability involves creating more inclusive societies, enhancing the empowerment of citizens, and fostering more resilient communities. Promoting financial literacy has an indisputable role to play in all of these aspects.

Financial Inclusion and Financial Wellbeing

Financial literacy is an important tool in ensuring and promoting financial inclusion. It can help individuals navigate the financial system and access financial services. Financial literacy also helps in reducing poverty, social inequality and promoting financial stability in communities. It aids individuals in making better financial decisions that can lead to improved financial outcomes, such as higher savings, lower debt and greater wealth accumulation. It can also help individuals avoid financial pitfalls, such as high-interest debt and fraudulent financial products. A study published in the Journal of Financial Planning found that individuals who were more financially literate were less likely to engage in risky financial behavior.

More informed financial decision making, higher levels of financial confidence and financial wellbeing are the evidence-based outcomes of financial literacy campaigns. There is also evidence to suggest that financial literacy can have a positive impact of economic growth. A study by the World Bank found that countries with higher levels of financial literacy had higher levels of saving, investment and economic growth.

Mental Well-being and More

As heartening as this is, there’s more to strengthening communities than just promoting financial wellbeing and economic growth. There’s the crucial aspect of mental wellbeing to consider, which is righty getting a lot of attention in recent times. However, financial literacy initiatives can also deliver on this front.

Research shows that financial stress is associated with increased risk of mental health problems including depression, anxiety and substance abuse. A study published in the Journal of Family and Economic Issues found that financial insecurity was associated with increased levels of psychological distress and lower levels of life satisfaction.

Financial literacy initiatives can help improve mental health outcomes by reducing financial stress and promoting financial well-being. The Journal of Consumer Affairs found that individuals who experienced improvements in financial wellbeing also experienced improvements in mental health outcomes, including reduced stress and improved quality of life.

While the link between financial literary and mental health is more commonly studied, it’s a small leap of logic from here to see how this impacts physical well-being. Financial stress has a detrimental effect on an individual’s health, causing headaches, backaches and digestive problems, among others. Empowering individuals with the financial education that helps them make financially sound decisions directly combats the source of stress and seems like an easy win.

Inclusive. Empowered. Resilient.

It is thus abundantly clear that financial literacy has a major role to play in the building of inclusive, empowered and resilient societies. This is not just in terms of financial and economic wellbeing but also in terms of physical and mental wellbeing as well.

These outsize positive outcomes that are an effect of financial literacy initiatives should spur us on to advocate for, and invest in these initiatives if we truly value social sustainability.

Very simply, social sustainability is the impact that a business has on society. According to Nobel Laureate Amartya Sen, this is measured across a number of dimensions like equity, diversity, quality of life, social cohesion and governance. A project/ business needs to deliver on all these aspects to be deemed socially sustainable.

An initiative to foster financial literacy in the younger generation is a perfect fit for corporations looking to augment their social sustainability scorecard. There are many reasons for this – The lack of financial literacy skills in the younger generation is well known and documented. It’s an issue that highly emotive and one that’s likely to stay relevant even years from now, given the magnitude and the degree of neglectedness of the problem. The current state of the global economy, rising unemployment, looming recession and skyrocketing inflation, all make the case for teaching smart money management to youngsters, both urgent and prescient.

With this backdrop, one can now neatly overlay the myriad benefits of a financial education program targeted at Gen Z: higher confidence and less anxiety in money matters, better mental health outcomes, greater control of their lives socially and economically, higher savings rate, more prudent use of financial instruments like credit cards, better understanding of debt and an early start to investing.

These benefits tie in beautifully to the social sustainability assessment criteria stipulated by WACOSS (Western Australian Council of Social Services). A few of these criteria are listed below:

• Will the project improve the physical and mental health outcomes for the target group (Quality of Life)
• Will it improve the education, training and skills development opportunities for the target group? (Quality of Life)
• Will the project assist the target group to have more control over their lives, socially and economically? (Equity)
• Will the program be delivered without bias and promote fairness? (Equity)
• Will the project identify diverse groups within the target group and look at way to meet their particular needs? (Diversity)
• Will the project improve the target groups’ understanding of and access to public and civic institutions? (Social Cohesion)
• Will the duration and budget of the project be sufficient to achieve the desired outcomes? (Governance)

A financial literacy initiative that’s scalable, transparent and verifiable; that’s specially curated for Gen Z; that’s widely tested, acclaimed and delivered by a team of professionals who have the relevant expertise, experience and empathy can easily fulfil the above criteria.

It’s an excellent opportunity for the business community to come together and engage in an initiative that helps deliver on UAE’s promise of a socially sustainable future.

It’s time to accelerate to the next step – to stop admiring the problem and to work on crafting a strategy that effectively deals with this seemingly intractable issue.

Not just any strategy. A strategy that’s worthy of the future generation and all’s that’s at stake if we don’t act thoughtfully and intentionally.

This goes beyond merely creating apps, putting up content on websites, or just running hour long awareness sessions that barely scratch the surface of this transformative skill. It involves going into schools, colleges and universities and expertly delivering a program that covers all the basics of personal finance. It involves trained and experienced educators curating discussions and establishing the emotional connections necessary for true learning.

There is new research that shows that in-person instruction is more effective in changing behavior than gamified or digital instruction, especially over the long-term. And the only worthy solution will be one that’s effective in the long-term.

The scale and neglectedness of the financial illiteracy problem necessitate wide-scale collaboration among the various stakeholders in this future – parents, schools, students, financial institutions and government bodies.

With collaboration as the bedrock principle, we can then build on a strategy that has the following 3 elements –

Standards: It’s said that anything worth doing is worth doing well. So, it’s imperative that any financial education initiative targeting Gen Z is modeled along global quality standards. Depth, nuance, sophistication and simplicity should be the key considerations.  Real value needs to be delivered.

And it’s not just the content that need to be considered here. Equally important are the standards of delivery; making sure that the educators involved have the expertise and experience in teaching youngsters.

Another essential aspect to examine – the ethical standards of the initiative. It’s vital that the initiative is not used to market financial products to the youngsters. Many of the current initiatives fail on this important metric and governments around the world are beginning to clamp down on this by legislating against it.

Scale: A worthwhile fin-ed strategy necessarily needs to be scalable. An initiative that benefits only a couple of dozen students isn’t going to cut it. The strategy needs to allow for scale and touch the lives of thousands of students.

The scaling up of the initiative requires resources, both capital and human.  This is no small ask; getting an initiative to scale up without compromising on the quality of the initiative or the quantifiable aspects of it is a formidable challenge but one that’s imperative to surmount.

Scaling up also requires a road map, which details how best to leverage the resources to create deep social impact.

Sustainability: A fin-ed strategy that’s deemed successful will have to be one that has sustainability at its heart. Sporadic, intermittent, topical efforts have no place in a worthy strategy. This would be a colossal waste of time and resources.

Consistency should be key here. Consistency shows commitment. Consistency enables the initiative to reap the effects of compounding, slowly but surely creating deep social impact.

A sustainable strategy in this regard should focus on initiatives that build deep collaborative relationships with the stakeholders involved. This is important because sustainability will be a key driver of the success metrics.

Now’s the time

This isn’t going to be easy. Interweaving the elements of standards, scale and sustainability into a financial education initiative is bold and demanding.

But this is what a worthy long-term fin-ed solution will look like. One that will positively affect the lives and success of the next generation.

The sooner we start implementing it, the better off Gen Z will be.