Toespraak van Prinses Máxima tijdens conferentie over duurzaamheid in de financiële sector op de Nyenrode Business Universiteit te Breukelen

'People, Planet and Profits Together: Financial Inclusion as a Path to Sustainable Development'.

Conference on 'Sustainability in the Financial Sector: Are We Ready?'

Good afternoon Professor Van Rooijen, Professor Lückerath-Rovers, Dr. Rinnooy Kan, Mr. Lake, ladies and gentlemen, students of the University.

I am pleased to be with you as Nyenrode Business University celebrates its 65th anniversary.

As we confront turbulent economic times, societies as a whole are questioning financial institutions. It is therefore timely that Nyenrode University is dedicating its anniversary to sustainability in the financial sector. But what is that?

When we talk about sustainability, we talk about people, planet and profit together. Whatever the sector, we should analyse how sustainability contributes to all three of these topics. So that is sustainability. And then there is the question of what a financial sector should do? Let us broadly define it as that of financial intermediation. Intermediation captures excess capital and makes it available to people that need it for investments.

Intermediation through an array of financial products for all who need them is essential for social and economic development. These financial products must be provided by a variety of sound institutions and for a reasonable price. And they must focus on client needs, given that financial services are a means to an end.
It is what the client can do with finance to improve his or her life that makes a difference.

So let us focus on people. How do financial services improve people's lives?

Today, more than 2.7 billion people around the world do not have access to any of the financial services that you and I rely on every day. In developing countries, only 18% of small and medium-sized enterprises have access to formal credit, insurance, payments, savings and current accounts, etc. Imagine the impact on production or job creation if we could change this situation.

We urgently need to connect people and enterprises with financial networks. The first step is to build the financial infrastructure that enables people to have physical access to services-be it from a bank branch, an ATM, a mobile phone, an agent or other.

Then, financial institutions must develop the right product and deliver it in the right place. We will only have impact if we offer financial products that people and enterprises really need and demand. So parents can save for their children's education. Or buy machinery to expand a factory's production. But these services need to be adequate. How many times have I seen long-term investments financed by repeated, six-week loans? Or an emergency loan to buy medicine when a savings account or insurance would have been better? In this way, terms for a loan or insurance for a maize farmer in Guatemala will be different than for a cocoa farmer in Ghana. And the owner of a small urban grocery will again need entirely different products. So basically, the adequacy of the financial product is extremely important.

All of these products must be delivered in a responsible manner. That is, these must be affordable. And in no way must they lead to over-indebtedness.

Providing financial services that add real value to customers in a transparent and responsible way is at the core of financial inclusion. This is not only in the developing world, ladies and gentlemen. It is here in the Netherlands, next door in Germany and around the world.

On October 31st, the world reached 7 billion people. Remarkable achievements in how we farm and live go hand-in-hand with this milestone. At the same time, we are seeing stark evidence of increasing strain on our planet. Simply put, more people means more use of water, land and minerals, and more pollution.
We have ample evidence of economic development successes. But what is good for one goal might not always be immediately good for another.

For example, no country has grown economically and reduced poverty without massively increasing its use of energy. This has obvious consequences on the environment.

Or let us talk about producing more food. Today, irrigation accounts for 70% of human demand for fresh water. Already this is unsustainable in many regions. And as poor rural farmers get wealthier, that means more cows, pigs and chickens.

More livestock means more methane, nitrous oxides and harmful gases. It also means possibly more land degradation and certainly more consumption of water. In the long-term, this will probably harm rural livelihoods. But in the short-term, preserving land and water seem to limit opportunities for local people to farm or earn money.

So, how to balance these trade-offs? The good news is we may not have to. For example, new drip irrigation is much more effective than open canals or flooding.
In Pakistan, one system has reduced water use by 50%. At the same time, it has improved yields by as much as 40% and lowered input costs by 30%. This drip irrigation also allows for farming throughout the whole year. So, fewer farmers are forced to migrate to cities during the dry season to look for work. Less water, lower costs, more crops, steadier income.

There are so many other promising solutions coming from all over the world. I visited a farmer in Africa who converts cow manure into clean cooking gas using a simple tank. Because the waste from the process is rich fertilizer, corn yields have increased. I have also seen how solar power is making electric water pumps and generators accessible to rural communities far from any electric grid.

Promising pilots are one thing. Solutions that reach scale and sustainability are something else.
This is where finance is critical. Financial institutions cannot design irrigation or provide bountiful water.
But they can design the financial product that allows a local company to manufacture irrigation tubes.
They can also design financial products that help a farmer purchase drip irrigation with a loan. Or allow the farmer to save revenues to buy fertilizer for the next season.

For all this to happen, we need tailored financial products that all seven billion people have access to.
The delivery of financial services must be sustainable in itself. Profits matter here because they will enable us to offer products to more people in a competitive and affordable way.

Ladies and gentlemen, sustainability in the financial sector requires a long-term vision from both financial institutions and investors. This means having the right incentives in place. I am happy that Mr. Lake from the UN Principles for Responsible Investment is here. In January, we Iaunched together with investors including PGGM and Triodos the Principles for Investors in Inclusive Finance. These Principles provide practical guidance to build responsible financial institutions.
I strongly believe that responsibility in finance will only be achieved through long-term investments.
So profits should also be seen in that light.

If we are successful in achieving responsible finance, we will also achieve stability in the financial sector. And, not only that, we will also accelerate what financial intermediation is supposed to do in the first place - create employment, advance sustainable development and foster equitable economic growth.

In closing, I would like to remind you again, that the role of financial services is intermediation. They help cover basic needs and meet aspirations. Financial services can foster thriving enterprises and accelerate sustainable development. So studying the specific needs of people and businesses in local contexts is essential.

Then, creating financial services that make affordable products available to everyone who needs them in a responsible way is paramount. In this manner we will bring sustainability to people, planet and profits together.

This is an opportunity for today's leaders and entrepreneurs. Focusing more on stakeholder value rather than only on shareholder value will give us the sustainability, stability and equity that we all desire.

I know this is a challenge. But if we focus on the long-term, we can do it.

I congratulate Nyenrode Business Universiteit on its 65th anniversary.

Thank you very much.