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A Deep Dive into the World of Ethical Fintech

Fintech, or rather the world of business in general, is changing a lot at the moment – this may be a permanent shift.  From the impact of Environment, Social and Corporate Governance (ESG), to the creation of fintech startups that are all about bringing about positive, ethical change, both consumers and service providers are making their way into a new, socially conscious future. Whilst this is a global issue that spans generations, it’s particularly concentrated with regards to millennials and fintech startups.

To take a closer look at this ongoing paradigm shift, we got in touch with a number of companies to get their views on these hot-button issues, including Tickr, SeedTribe and Cooler Future. These startups are right at the centre of this world of ethical finance/business, and provide an excellent example as to what Fintechs have to offer in this area.

Being Carbon Neutral as a Company in 2021

Carbon Neutral. This once-unheard of phrase ascended to the status of a buzzword in the world of business. Companies, especially those with an international focus, want to advertise that they are either currently carbon neutral, or will become so very soon. But to a switched-on ethical Fintech startup, what does being Carbon Neutral in 2021 really mean?

Tom McGillycuddy, the co-founder of Tickr, an ethical investment app, describes being carbon neutral as “fundamental” to how their startup operates, “Sustainability and making the planet a better place is the core of everything we set out to do as a company. It can’t be about lip service and greenwashing – action starts at home, so it’s always been crucial for us to practice what we preach.”

Planning to ‘go carbon neutral’ may look on a company’s website, but how exactly does a Fintech company go about doing this? Hanna Värttö, Impact Lead at Cooler Future, who focus on impact investing and tackling climate change, has little doubt when it comes to Cooler Future’s priority: “Becoming carbon neutral should be first and foremost about reducing emissions. Once that has been optimised, then you should approach how to offset the remaining emissions. This is important for everyone, as reducing carbon emissions also allows decreasing the costs and risks associated with carbon emissions.”

A New Decade, a New Approach?

Companies exist for the sole purpose of generating profit for their shareholders, right? Until recently, that was a commonly-held belief of many in the world of business and finance. Now, more and more organisations, particularly start-ups in the Fintech industry, are aware of a much broader set of goals that they would like to aspire to.

Olivia Sibony is the CEO and Co-founder at SeedTribe Impact Investment. With SeedTribe’s stated goal as being a community that focuses on businesses that are improving the world around them, she’s at the heart of this commercial revolution. When asked to explain the purpose of a modern-day company, she explained that “Any new company that is formed should only be set up with the main goal of generating profit through its purpose of addressing a social or environmental challenge. That for me is the basic, non-negotiable of a business: profit and purpose are aligned.” What does that look like in practice, though? For Olivia: “In addition to the business model itself, a company should have socially and environmentally sound policies as well as a good governance structure.“

For Tickr, their view on this topic is shaped by the fact they are a certified ‘B Corp’ – a business that meets the highest standards of social and environmental practices. Tom McGillycuddy explains how this shapes their approach as a company: “We’re part of a community of businesses working to reduce inequality and poverty levels, build healthier environments, empower stronger communities and create jobs with dignity and purpose.” Are B Corps perhaps the future of corporations across the UK, and the world? Tom certainly thinks so, believing that “B Corps are redefining what it means to be successful in business – while building a more inclusive and sustainable economy in the process.”

The Role of Fintech in this New Approach

Fintech startups often find themselves at the cutting edge of the latest developments in the worlds of finance, technology and business.  With a reputation for innovation, it would be natural to assume that they would lead the way when it comes to this mentality shift in terms of how to do business. But how do they go about doing so?

Hanna Värttö explained that this is something that Cooler Future is very passionate about, believing that “Fintech solutions can bring sustainable products closer to retail investors. With the younger generation becoming more interested in investing and looking for sustainable and climate-friendly investment products, Fintech companies can play an important role in helping them to identify the right funds that fit their criteria.” Hanna also went on to highlight that Cooler Future is attempting to do their bit, by creating “more transparency and awareness related to investing”. She pointed out that they do this by making climate performance metrics a major part of the investment decision-making process.

Olivia Sibony expressed a very similar view, in that she agreed that Financial Services plays a “critical role” in this new approach. She went on to explain how SeedTribe, and the fintech companies that they work with, will play such a necessary role: “Money is the universal language that enables these processes and transactions to happen. But money is the tool to make change happen and is not the end goal in itself. Instead, financial products should be designed to serve people and the planet. So, in my mind, this shift in our way of working can only happen through Fintech, with innovative products that are designed to allow for-profit to be created through social and environmental solutions.”

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