Now encapsulating a focus on societal impact and the environment, the term ‘fintech for good’ has evolved from its initial meaning of charity. But it doesn’t stop there. This July, we are on the hunt to find out how the fintech industry is doing ‘good’ for local communities and the world, revealing current and future plans to make change.
Having explored some of the biggest obstacles fintechs face as they look to achieve net zero, and which countries’ fintechs are having the biggest impact on the environment, we now turn our attention to how fintechs can help firms track their carbon footprints
Boosting accuracy and transparency
As the call for greater environmental and social awareness has emerged in the last few years, organisations have made a special effort to show what they are doing in response. However, there was a serious issue of greenwashing, where firms claimed to be making a difference but in reality, doing very little.
Maureen Doyle-Spare, head of financial services at IT firm UST
According to Maureen Doyle-Spare, head of financial services, UST, the digital transformation solutions company, fintechs can help improve transparency about carbon emissions.
“Significant strides are being made by fintech companies in the fight against climate change, helping businesses achieve their carbon footprint goals by enabling precise tracking of carbon emissions and other environmental impacts.
“Fintech pioneers are using cutting-edge technology to boost accuracy and transparency across the entire carbon lifecycle. By leveraging blockchain solutions, they are making carbon markets more accessible, aiming to tokenise the voluntary carbon market. This breakthrough enhances price discovery, transparency, and overall market accessibility.
“In addition, fintech firms are leveraging data analytics and machine learning to help businesses measure and manage their environmental impact. These powerful platforms allow companies to monitor, reduce, and offset their carbon footprints based on international carbon accounting standards. They also engage employees and suppliers in the climate journey, fostering a culture of sustainability.”
Accelerating decarbonisation
Claire Mongeau, investor at Founders Factory
Fintech initially helped financial firms with carbon tracking but they can do so much more now explains Claire Mongeau, investor at Founders Factory, the startup funding platform.
“The first wave of carbon accounting solutions addressed some firms’ issues of tracking their carbon footprint, automating data collection and reporting, and expediting insights. But tracking is only one step in the process that is, at its core, an audit or compliance activity. The next generation of solutions should move us from tracking to actively accelerating decarbonisation.
“Particularly exciting are fintechs demonstrating how net zero initiatives can positively impact financial bottom lines, modelling the commercial consequences of not addressing climate risks or opportunities. Some tools are also becoming more refined in dissecting emission data in firms’ operations, showing how measures create genuine long-term improvements versus temporary wins, making it easier and financially incentivising transparency.
“There are also good opportunities for fintechs to plug into carbon certificate validation, project monitoring, and insurance. This next wave of climate fintech can help the industry move towards standardising net zero actions as, financially, the best and the right thing to do.”
Better tracking through blockchain
Martin Hartley, Group CCO of emagine
For Martin Hartley, Group CCO of emagine, the consulting firm, fintechs can help firms on their carbon missions in a variety of ways. Specifically, he notes the role blockchain can play in improving tracking.
“There are opportunities through various platforms and technologies. Fintech companies can develop carbon accounting software that helps firms collect, analyse, and report their greenhouse gas emissions data in a standardised and transparent manner.
“They can also support on ESG data analytics. Fintechs can use advanced analytics and machine learning techniques to help firms track and monitor their environmental performance, including carbon emissions, energy consumption, and waste generation.
“Fintechs can leverage blockchain technology to create immutable records of carbon-related data, enabling firms to track their emissions across their supply chains and verify their sustainability claims. Another way that fintechs can help is through green finance solutions. Fintech companies can offer financial products and services that incentivise firms to reduce their carbon footprint, such as green loans, carbon offsetting programs, and impact investing platforms.”
Accessible, affordable and scalable products
Jenny Pidgeon, VP of sustainability at FTSE 250 Eurowag
Jenny Pidgeon, VP of sustainability at EUROWAG, the payments solution provider, highlights a variety of different technologies that fintechs can integrate into a firm’s infrastructure to ensure better carbon tracking.
“The market offers such a wide variety of fintech solutions that span the entire process using cutting-edge tech like AI, big data and blockchain. From data analytics tools that measure, monitor, and identify trends, to compliance software that ensures regulatory alignment, and platforms that facilitate carbon offsetting, we can track and reduce companies’ climatic impact by decreasing greenhouse gases in the atmosphere.
“The key is to offer products that are affordable, easy to access and scalable to make it as easy as possible to enable responsible business practices.
“Fintech companies can help firms track their carbon footprint by integrating and leveraging primary data from various sources to provide comprehensive and real-time carbon accounting, as well as utilising AI for predictive analytics, and IoT for real-time data collection. By automating the data collection and analysis process, fintechs enable firms to monitor their emissions accurately, identify reduction opportunities, and report their progress towards sustainability goals with greater confidence and precision.”
The post How Are Fintechs Helping Firms Track Their Carbon Footprints? appeared first on The Fintech Times.
