Annex 1: BigFintech and Sustainable Development Goals (SDG) tiered impact tables Based on our tabulated data, case studies and research, we identified impacts (intentional and unintentional and both positive and negative) across a range of environmental, social and economic SDGs for the LDCs. We determined three tiers of impacts: (i) from direct service offerings; (ii) from integrated services, operations, infrastructure and processes; and (iii) from business models, the value chain and the overall ecosystem (vertical and horizontal integration) including cumulative and systemic impacts. A summary table of the tiered impacts is provided in Technical Paper 1.1 while the full version by BFT category is provided below. This categorization is a concluding descriptive rather than normative or prescriptive tool to help better understand the intended and unintended and the positive and negative impacts across BFTs direct services and operations, as well as the broader ecosystem and value chains of BFTs on LDCs. We believe this warrants further examination and such a tool as is currently used to define Scope 1, 2 and 3 climate emissions, could serve to better understand the scope of SDG impacts as well as fluid regulatory implications. BFT CATEGORY LEVEL TIERED IMPACT TABLES BFTs Tier 1 impacts: from Tier 2 impacts: from Tier 3 impacts: from type/cate direct services services, operations, business model, value gory and offering infrastructure and chain and ecosystem examples Impacts relate to the direct processes (vertical and horizontal intended goals (financial Impacts include positive and integration) including inclusion and economic negative individual and growth) which are generally institutional effects. cumulative and positive but also include the systemic impacts direct unintended impacts Impacts relate to activities which are both positive and stemming from inherent negative. business models and ecosystems (across regulatory sectors and SDGs). Technical Paper 1.1: BigFintechs and their impacts on sustainable development - Annexes 1-6 I Payment Access to financial services has Data privacy, security and Payment platform ecosystems have platforms a positive impact in addressing algorithm bias also negatively both negative and positive impacts poverty (SDG 1), gender impact gender equality and other on peace, justice and strong Regional equality (SDG 5) and reducing inequalities (SDG 5 and SDG 10) institutions (SDG 16), work and mobile money inequalities of other minorities by increasing rather than economic growth (SDG 8) and providers and or segments of LDC reducing the gaps in financial industry, innovation and global populations (SDG 10). access and inclusion for women, infrastructure (SDG 9.) LGBTQ and minorities without payment An increase in financial access to technologies who Payment platforms underpin and platforms inclusion positively impacts therefore cannot access these enable a growing number of clean industry, innovation and new financial services (SDG 10). energy (SDG 7), biodiversity (SDGs Alipay (Ant infrastructure (SDG 9). 14 and 15) and climate mitigation technology Partnerships and initiatives of initiatives (SDG 13). However, group), Apple The availability of payment platforms, such as offsetting schemes and techniques Pay, Fnality, micropayments to SMEs and Alipay’s Ant Forest and M-Pesa’s are rife with challenges including in Facebook, facilitation of remote payment solar energy initiatives positively measuring impact and the potential Google Pay, positively impacts decent work impact good health and well- to do harm (biodiversity, land JPM Coin, and economic growth (SDG 8). being (SDG 3), responsible change, etc.)2 particularly in LDCs. MTN, Paytm, consumption (SDG 12) and People’s Bank Data privacy and data security underpinning environment Increased consumerism and of China, negatively impact peace, justice (SDGs 14 and 15) and climate enabling activities such as online Safaricom, and strong institutions (SDG initiatives (SDG 13). gambling are negatively impacting 1 Tencent 16). as these cause economic losses and (WeChatPay). can lead to poverty (SDG 1) deterioration of health and well- being (SDG 3) and excessive consumption (SDG 12). Rapid evolution of technology means underlying issues of literacy and education for specific segments or regions will see further inequalities (SDGs 4 and 10). A ‘new digital divide’ will negatively impact jobs and economic growth (SDG 8) and industry, innovation and infrastructure (SDG 9). Increased access to debt by lowering barriers and encouraging credit can create a systemic default/liquidity crisis, negatively impacting both individuals and financial institutions (SDG 1 and SDG 16). e- e-commerce and marketplace ‘Bricks and mortar’ SMEs are The new tier of market and growing commerce/m platforms provide being displaced. invisible and unregulated third- arketplace infrastructure and capacity to party value chains have negative platforms sell goods (and cases of On e-commerce/market platforms impacts across labour (SDG 8), training programmes) to prices for vendors are being sustainable consumption and Online increase financial inclusion, depressed or products blocked by production (SDG 12), environment platforms for and have a positive impact on market algorithms, which (SDGs 14 and 15) and climate (SDG reducing poverty (SDG 1) and negatively impact the 13) as these platforms are likely to marketplaces, hunger (SDG 2), facilitating development goal of promoting emit more CO2 than a small country. connecting quality education (SDG 4) and decent work and economic sellers with achieving gender (SDG 5) growth (SDG 8) as well as buyers equality (SDG 10). reducing inequalities (SDG 10). (products or 1 There is no single SDG related to data privacy and security but there is a call for SDG 18 Ensuring the Digital Age Supports People and Planet. See Luers A, ‘The Missing SDG: Ensure the Digital Age Supports People, Planet, Prosperity & Peace’ IPS, Montreal, July 2020, <www.ipsnews.net/2020/07/Missing-sdg-ensure-digital-age-supports-people-planet-prosperity- peace/>. 2 Whieldon E, ‘Scientists See ProbleMs with SoMe Carbon-Offsetting Tree Planting PrograMs’, S&P Global Market Intelligence, June 2020, <www.spglobal.coM/Marketintelligence/en/news-insights/latest-news-headlines/scientists-see-probleMs-with- soMe-carbon-offsetting-tree-planting-programs-59163058>. Technical Paper 1.1: BigFintechs and their impacts on sustainable development - Annexes 1-6 II services) B2B, Micropayments to SMEs Climate (SDG 13), environment The opaque value chains B2C, C2C provide access to capital, goods (SDG 15) and labour rights (SDG (comprising almost 50 per cent of and services for decent work 8) are covered by some CSR the market) are bypassing Amazon, and economic growth (SDG 8). initiatives with positive impact, regulatory and CSR standards Alibaba, specifically on core operations having global implications related Facebook, Issues of data privacy and data and goods but this does not to third-party vendors which are eBay, Fiverr, security regarding consumer generally apply for activities in similar in scope to social media information and protection LDCs. Moreover, offsetting content issues. Jio, Jumia, negatively impact individuals scheme issues may exist as noted Reliance, as well as the soundness and under ‘BigTech cloud services’. Counterfeit items fuel activities that Upwork, stability of strong institutions undermine democracy, peace, Mercado (SDG 16). Lack of traceability of vendors, justice and strong institutions (SDG suppliers and goods negatively 16) as well as gender (SDG 5) and impacts employment conditions inequalities (SDG 10). Strong (SDG 8), gender equality (SDGs 5 institutions (SDG 16) are also and 10) and overall inequalities negatively impacted as BFT are not (human rights and labour issues) paying benefits or taxes with LDCs. (SDG 10) directly in LDCs where goods are manufactured. Social media Access to technology and the Targeted advertisements and Social media platforms could platforms Internet has a positive impact misinformation campaigns have further exacerbate the digital on industry, innovation and influenced elections, climate divide, especially for women and Venturing into infrastructure (SDG 9) and denial and the spread of rural populations, furthering payments and increasing employment (SDG conspiracy theories, negatively inequalities (SDGs 5 and 10). social 8). impacting peace, justice and commerce strong institutions (SDG 16) . Platforms can enable Social media platforms misinformation campaigns or venturing into cryptocurrencies Integration with payment agendas undermining peace, Facebook’ could offer broader financial infrastructure is providing justice and strong institutions at Marketplace, inclusion (SDG 1) without financial inclusion (SDGs 1 and 5) international scale (SDG 16). Facebook Pay, access to the formal financial for women. Diem, SME system. The combined business models of Grants, payments integrated in social WeChat Issues of data privacy and data media platforms can result in security regarding consumer ‘digital colonialism’. information and protection are negatively impacting Integration with payment individuals as well as peace, stablecoins could have an impact justice and strong institutions on financial institutions and on (SDG 16). global financial stability. BigTech BigTech cloud platforms Access to cheap technology Where energy usage and emissions cloud provide access to inexpensive allows LDCs to bolster industry are disclosed,