Ethical Banking Feature Stories View from the Top

ESG in 2024: Insight From ekko, Finfra, IBM Cloud, DivideBuy, Alteryx, Proxymity, Visual Lease

It’s a time of reflection and anticipation at The Fintech Times throughout December, as we look back at developments and trends over the last 12 months and forward to the year ahead.

We’re excited to share the thoughts of fintech CEOs and industry leaders from across the globe to 2023’s key takeaways and what we should expect to be top of the agenda in 2024.

Our fintech leaders today provide insights into the growing importance of sustainability in business, the rise of ESG financing, and the need for greater transparency and innovation in environmental reporting.

Sustainability business blooms
Oli Cook, CEO and co-founder at ekko
Oli Cook, CEO and co-founder at ekko

For Oli Cook, CEO and co-founder at ekko, eco-consciousness isn’t a passing trend – it is increasingly becoming a significant shift in how businesses operate and how people think.

“Customers, investors, and employees are increasingly mindful about sustainability, and this awareness is shining a spotlight on businesses who can help others achieve their sustainability goals, such as ekko.

“Businesses championing sustainability aren’t only beneficial for the planet; they’re also pioneers in valuable innovation. Companies like ekko, who integrate with partners to seamlessly integrated sustainability into their core, are developing ground-breaking solutions and cultivating brands that resonate deeply with people.

“This growing emphasis on sustainability is driving some truly impressive innovation. We’re seeing the development of simpler, more effective eco-friendly solutions, making sustainability a substantial advantage for businesses in 2024 and beyond.”

Decision-making
Prakash Pattni, global MD for financial services digital transformation at IBM
Prakash Pattni, MD, digital transformation at IBM Cloud for Financial Services

Prakash Pattni, managing director, digital transformation for IBM Cloud for Financial Services, is responsible for partnering with financial services clients to deliver their transformational outcomes through IBM Cloud.

He also discusses the rise of sustainable finance.

“Sustainable finance is another important trend we are likely to see gain momentum next year.

“Sustainability assessments will play an increasing role in the banking decision-making process, for example banks are increasingly using data and AI to assess the sustainability credentials of their lending portfolios.

“This will continue, and banks will use this data to develop new sustainable finance products and services.”

Unified data views

Bill Harter, principle ESG solutions advisor at Visual Lease, the lease optimisation solution provider, reflects on the role of technology in supporting mandatory corporate ESG reporting.

Bill Harter, principle ESG solutions advisor at Visual Lease,
Bill Harter, principle ESG solutions advisor at Visual Lease,

“Only one-third of companies disclose quantitative or qualitative links between climate-related impact in their financial statements, suggesting that climate risk and impact is not being considered equally within financial performance.

“Similarly, nearly 70 per cent of senior finance executives at enterprise organisations say that their teams are not fully prepared to track and measure the environmental impact of their leased and owned asset portfolios.

“Given the growing interest in ESG, as well as evolving environmental reporting requirements from various regulatory bodies, including the State of California and The International Sustainability Board (ISSB), this gap in financial reporting is extremely concerning.

“While we don’t have a firm date for when the SEC will announce its official requirements, one thing is clear – companies can get ahead of these regulations by getting a firm handle on the related data.

“Because nearly 40 per cent of global carbon dioxide emissions originate from real estate-related assets, we expect to see finance leaders prioritise technology that supports united data views across all teams that handle leases and their related records.

“Doing so early on in 2024 will enable these organisations to centralise and analyse consumption data of greenhouse gas emissions and know that when it comes time for reporting, they are drawing from a complete and auditable view of their environmental impact.”

Innovative solutions
Reinis Simanovskis, co-founder and CTO of Finfra
Reinis Simanovskis, co-founder and CTO of Finfra

Looking forward to 2024, we can anticipate ESG financing gaining more prominence, says Reinis Simanovskis, CTO and co-founder of Finfra, a ‘one-stop shop’ for businesses integrating white-labelled lending products in Indonesia.

“A notable trend is the increasing momentum of ESG financing, with fintech companies emerging as preferred partners over traditional banks.

“Fintechs’ proximity to end borrowers and their dedication to crafting innovative solutions make them valuable allies in advancing ESG initiatives.

“The financial landscape is poised for innovation, growth, and a more customer-centric approach.”

Embedding sustainability
 Dave Farbrother
Dave Farbrother, CEO at DivideBuy

We’ll see an increase in finance firms embedding sustainability efforts into their strategies in 2024, says Dave Farbrother, CEO at DivideBuy, a provider of retailer financing solutions.

“Finance firms will be looking to take integration to the next level in 2024,” he commented. “More and more businesses will look for ways to offset their carbon footprint, and communicate those measures to customers through metrics that matter.”

“The recent AI breakthroughs will undoubtedly influence multiple aspects of financial services, from automating customer support and credit decisions to far more sophisticated fraud prevention,” he also added.

Step up CFOs
 Kevin Rubin, CFO at Alteryx,
Kevin Rubin, CFO at Alteryx,

Chief financial officers (CFOs) will be responsible for initiating discussions throughout their organisations to make ESG (environmental, social and governance) a top-level corporate initiative, suggests Kevin Rubin, CFO at Alteryx, the analytics cloud company.

“With stricter climate disclosure mandates and other potential ESG regulations in place and on the horizon, many companies are bracing for how these new requirements will impact their business strategies.

“In 2024, we will see CFOs being held accountable for driving conversations across the enterprise to ensure ESG becomes a corporate level initiative.

“While ESG reporting remains murky, companies need to focus on operating more authentically, ethically, and confidently across the business, not just the office of finance.”

Shift in investors’ ESG priorities
Dean Little, CEO, Proxymity
Dean Little, CEO, Proxymity

Dean Little, CEO of digital proxy voting service Proxymity, suggests that tensions between shareholders and boardrooms regarding ESG issues may escalate in 2024 due to frustrations about transparency and visibility in ESG decision-making.

“2023 once again witnessed tensions between shareholders and boardrooms on ESG; 2024 could see this boil over, partly due to the underlying shareholder frustrations about visibility and transparency, on ESG decision-making.

“Studies do suggest there is a shift in investors’ ESG priorities, where investors are increasingly opting for proposals that yield financial benefit over ESG plans where a commitment to the latter comes at a cost to the former. ESG proposals saw average favourable votes drop from 37 per cent to 20 per cent; likewise majority approval, from 23 per cent to just three per cent.

“However, unprecedented levels of data disclosures in 2024, and a surge in the readiness of investors to initiate proxy contests, will necessitate an overhaul of the outdated proxy voting system that hinders effective shareholder engagement.

“Many thousands of issuers globally, including 70 per cent of FSTE 100 in the UK alone, as well as the world’s biggest custodians, together with the largest investors have all onboarded Proxymity’s digital proxy voting solutions to streamline communication channels, directly addressing this issue.

Organisations hoping to leave activist shareholders in their rearview mirror should instead offer them a passenger seat, where the communication is transparent, real-time, and collaborative. With digital proxy voting technology a reality, this is now eminently possible”

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