What is Green fintech
12 May 2022
Meeting ESG (environmental, social and governance) criteria is becoming an increasingly important goal not only for companies but also for more and more investors and consumers that support this idea. According to Refinitiv data, investors’ interest in sustainable assets increased by 34% in 2020, with a 61% that came to Millennial investors. The same percentage applies to consumers of this generation who are looking for products manufactured according to these criteria. By 2030, sustainable business models could create economic opportunities worth $12 trillion a year and nearly 400 million jobs, particularly in developing countries. But to ensure that the objectives in line with sustainability are achieved, a careful assessment of their implementation is immediately necessary . An assessment that turns out to be accurate and effective only if it has a solid technological infrastructure with uniform, standardized and consistent indicators and measurement methods. As a result, an unusual technological explosion is taking place within the industry with sustainable big data becoming increasingly important, with nearly 200 data providers and countless fintech startups operating globally (according to the report of KPMG Pulse of Fintech H1’21’).
International alliances, innovation and standardization
Leveraging technology, large international organizations are working to define a more sustainable economy. The banking sector in particular is promoting a zero-emission alliance (Net-Zero Banking Alliance, or NZBA), of which BBVA is a founding member. Through this agreement, members pledge to reduce net greenhouse gas emissions to zero by 2050 for movement and movement of money. The direct impact of the activities of its members must be neutral, a goal that BBVA has already reached in 2020. As part of its Green Fintech Challenge 2021 and in partnership with the City of London Corporation, the UK Financial Conduct Authority (FCA) is managing a cohort in its digital sandbox to accelerate innovation and develop fintech projects that can:
- Help consumers be informed about the sustainability of the products they purchase and find options in line with their needs and preferences.
- Automate obtaining reliable ESG data from listed issuers and validate the green bonds they issue.
- Encourage transparency in reporting on sustainable issues.
To standardize the presentation of these reports in terms of sustainability, the Davis World Economic Forum published the Stakeholder Capitalism Metrics at the end of 2020. A number of metrics include criteria for ethical behavior, diversity and inclusion, water consumption, job security, innovation, wage fairness, anti-corruption and greenhouse gas emissions, among others. As the market continues to evolve, influenced by the environmental and social challenges that require solutions, technology is seen as the best way for a greener and more inclusive future.