Green Fintech: When Sustainability Meets Finance and Technology
The Sustainable Development Goals are a universal call for action by all people and the world to achieve a better and more sustainable future. They were set by the United Nations in 2015 as a collection of 17 global goals. In response to this blueprint, countries across borders and businesses across industries are increasingly becoming environment-centred—and finance is no exception. A decade ago, fintech became a thing; today, green fintech is a new trend.
According to Lexology, the term green fintech “typically describes companies or initiatives which have a positive impact on the environment, e.g. resulting in lower greenhouse gas (GHG) emissions or greater biodiversity.” Being an early concept, the ecosystem of green fintech is rapidly growing.
The infographic above listed up seven green fintech companies in the G7 countries. Some are literally committed to greening the planet, while others aim to solve other sustainability-related issues such as eliminating poverty and democratizing green energy.
Canada | Overbond AI | Founded in 2016
Overbond develops AI-driven real-time data solutions for bond trading automation. It utilizes these AI and data-driven solutions to work with Environmental, Social, and Corporate Governance (ESG) issuers. Its issuer analytics monitors the green bond market. It can quantify green bond premiums, measure green bond issuance options in different currencies, and identify green bond investor holding patterns.
France | Helios.do | Founded in 2012
Helios.do is a sustainable banking alternative. It is building a new banking model focusing on transparency and sustainability. The company aims to reduce users’ carbon footprints by offering them “an ecological bank account,” that only finances ecological businesses, excluding any companies posing a risk for the climate and biodiversity. It calculates the footprints based on GHG emission data from companies. Additionally, users can track their carbon footprint using their card.
Germany | Tomorrow | Founded in 2017
Banking for a better future—Tomorrow is a mobile banking that combines transparency, digital technology, and sustainability. It offers ecological and ethical credit cards that finance users’ money to generate a positive impact on the environment. Moreover, the bank invests in sustainable projects such as renewable energy, social housing, rain forest, and green bonds.
Italy | Flowe | Founded in 2020
Founded by Italy’s largest bank Banca Mediolanum, Flowe develops financial software to promote more environmentally friendly lifestyle. Similar to other sustainable banking services, it offers wooden cards and mobile banking. However, what makes Flowe ahead of others is that it takes partnership with Microsoft. It aims to further develop AI and machine leaning to analyze customer data through this partnership. It then pinpoints customers’ behavior and inspires them to make more sustainable decisions.
Japan | Global Mobility Service Inc | Founded in 2013
GMS aims to create sustainability by providing loan opportunities for those who cannot access financial services due to lack of credit history or collateral so that they can buy vehicles to make a living in mobility-related workplace. IoT devices and big-data-based platform control their vehicle engine and analyze their working behavior. These data eventually empower users: drivers can now access auto-financing to improve their living standards. Furthermore, it promotes environmentally friendly vehicles to reduce GHG emissions.
UK | Treecard | Founded in 2020
Treecard is a full-stack green finance platform that allows users to spend, save, and invest responsively. Taking partnership with Ecosia that uses money generated from ads to plant trees, it launched a wooden free top-up debit card that funds reforestation by using merchant transaction fees. Treecard also supports mobile payment such as Apple Pay, Android Pay, and Samsung Pay.
USA | Raise Green | Founded in 2018
To create a healthy, just, and sustainable future, Raise Green offers a platform to invest in climate action projects such as renewable energy, affordable housing, or urban agriculture. It aims to democratize renewable energy ownership, increase community resilience, and help facilitate the transition to a decarbonized future. Creating new investment pathways accessible to everyone will enhance sustainability of society.
Green Initiative in Fintech Transforms the World
As the world is getting hotter, mitigating climate change is imperative. In 50 years from now, most of today’s adult population would not be here but our children would be. How would the world look like then? Would it be a better place to live or not? Would it be more sustainable, just, and equal then? It is not possible to answer these questions with 100% certainty, but we can take action to achieve SDGs both collectively and individually for future generations.
Green fintech enables not only companies but also users to make more environmentally conscious decisions. Particularly, the global health crisis has put more pressure on companies to consider sustainability through their ESG management. Fintech that aims to have a positive impact on sustainability will continue to evolve and grow.