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How Fintech Is Celebrating the 50th Anniversary of World Environment Day

Today marks 50 years since the United Nations designated 5 June as World Environment Day, which advocates sustainability and environmental moderation within every facet of life. Under this year’s theme ‘Only One Earth’, the same title used in the original 1972 Stockholm Conference on the Human Environment from which the event was derived, today we examine how the fintech industry around the world has embraced the need for change. 

The world has changed drastically since that original Stockholm conference, and so too has public consciousness around the topic. Concern for the environment has become an all-available trait, because, as this year’s theme emphasises, there is only one earth.

Good fintechs that do good listen to what their customers want, and failure to adhere to this immutable cry for higher standards has the ability to flick the kill switch on any industry player.

The majority of knowledge workers that were recently surveyed by Cloudera believed that the data their business uses on a day-to-day basis should be focused on doing good for the communities it serves. This is a sentiment 66 per cent of business decision-makers agree with; a clear indication that profit and environmental, social and governance (ESG) are no longer mutually exclusive pursuits.

Its report also shows how workers are prepared to abandon their company if they do not support ESG initiatives, like those set out by World Environment Day for example.

This industry appetite for deeds over words was underlined by a recent study from the behavioural finance experts Oxford Risk, which uncovered how 50 per cent of investors are intending to move some of their funds, including pensions, into ESG this year; with one in seven planning to move 60 per cent or more.

Likewise, Workiva Inc. reported last year that 72 per cent of the 18 to 34-year-olds it surveyed wanted to know whether a company lives up to its social and moral beliefs before they invest in it.

There is a lot going on in fintech’s circles of thought around ESG, and it is definitely something that everyone is at least aware of.

Last month’s findings of the London-based financial service innovation platform TISAtech and its partner The Disruption House really brought this to light, stating that three in four finance firms in the UK plan to bring in a permanent in-house hire this year to handle and maintain ESG efforts.

“The UK has long been at the cutting edge of financial services. However, this is a time of unprecedented technological and operational change, causing institutions across the sector to re-examine how and why they do what they do,” said Gary Bond, CEO of TISAtech.

Rupert Bull, CEO of The Disruption House
Rupert Bull

Rupert Bull, CEO of The Disruption House, added: “Preparedness for ESG is no longer negotiable in financial services, and this is evidenced by our research. But businesses can still go further.

“If we look at the pace of change in sectors like retail, it’s clear that the financial services sector still has the potential to improve, and that regulation can and will go further.”

And the regulation is going further. In the UK specifically, regulations like sustainability disclosure requirements (SDR), which are due to come into force sometime in 2023, set out a framework that would require finance firms to disclose the percentage of their capital spending and turnover that’s associated with taxonomy-aligned activities.

Additionally, SDR requires firms to report on the Taskforce on Climate-related Financial Disclosures (TCFD) and the standards developed by the IFRS Foundation’s International Sustainability Standards Board (ISSB); launched in conjunction with Glasgow’s COP26 last year.

However, as Avanade and Efma have previously stated, a variety of banks are way off-track to achieving their ESG standards. According to the data, only 53 per cent of banks will be ready for regulatory reporting in the next six months, whereas almost one in five are still unclear as to what the requirements are.

This fact has been sorrily underlined by recent studies from both the British Business Bank and Tandem Bank, which solidified the level of both business and consumer unpreparedness for net-zero, and how many continue to feel overwhelmed by all the complex jargon that surrounds the topic.

Shanika Amarasekara, chief impact officer for British Business Bank
Shanika Amarasekara

Shanika Amarasekara, chief impact officer for British Business Bank, said: “Smaller businesses are far too often put off by the over-complex ‘carbon jargon’ that comes with reducing emissions. This will become an increasingly important business requirement.

“Given that many consumers now consider sustainability when they make a purchase, by becoming greener, smaller businesses can enhance their competitive edge and expand their customer base.”

Adding to this, Tandem Bank’s CEO, Susie Aliker, said: “This research shows conclusively the scale of the challenge for Brits to meet net-zero commitments by 2050. Whilst greening homes is at the heart of the UK’s plans, it’s clear we need increased awareness and support to equip them to tackle this important challenge.

Despite struggling to put its best foot forward at times, the fintech sector remains adamant to show its best front for the sake of the environment. So what’s taking place in the world of ESG fintech today?

Fintech in World Environment Day 2022

ITP Media Group, Visa and Safran have joined Emirates Nature-WWF‘s ‘Leaders of Change‘ programme, together pledging over 700 new members who will spend the coming year training, ideating, and acting in nature for people and the planet.

The programme enables government and corporate entities, individuals and students in the UAE to maximise their impact and transform the world. Members undertake on-ground training and development to co-create solutions with like-minded peers and realise worthy ideas with the support of incubation programmes and the Leaders of Change network.

Their participation and annual membership fees contribute to on-the-ground projects that help achieve the UAE’s net-zero and nature positive agenda.

The announcement follows Emirates Nature-WWF’s recent collaboration with Carrefour – which is owned and operated by Majid Al Futtaim in the UAE – to create a new range of reusable bags to mitigate excessive plastic consumption and conserve natural resources.

“Visa will continue to maintain carbon neutrality through efficiency, renewable energy and limited offsets across our operations,” said Dr. Saeeda Jaffar, Visa’s group country manager and senior vice president for the GCC region.

“The Emirates Nature-WWF Leaders of Change programme provides us with an important platform to engage youth in the UAE to do something remarkable for the environment.”

Elsewhere, the Chicago-based mortgage lending and digital financial services provider Guaranteed Rate Companies has announced that its end-to-end digital fintech tool FlashClose, which was launched in 2019 and enables homebuyers to sign documents and close on their loans remotely, has helped to protect the environment from 17 million sheets of paper.

Since it was launched, FlashClose has been used by Guaranteed Rate Companies to reportedly close more than 335,000 loans for a total loan volume of more than $100billion.

Ramesh Sarukkai, Guaranteed Rate chief product and technology officer
Ramesh Sarukkai

“We are incredibly proud that our industry-leading, end-to-end digital FlashClose℠ tool has had such a positive benefit on the environment,” says Ramesh Sarukkai, Guaranteed Rate’s chief product and technology officer. “It is just one example of the ways our tech team is creating fast, simple and innovative fintech tools to enhance the lives of our customers.”

Also in the US, Ogallala Life and AcreNFT are launching their second round of non-fungible tokens (NFTs) today to raise funds to save the Ogallala aquifer; America’s largest groundwater aquifer that, through over-production, has lost 10 trillion gallons of water over the past 40 years.

If the aquifer dries completely, geologists estimate that it could take more than six thousand years to replenish.

The duo’s first launch of NFTs managed to raise $200,000 for the project, with which the company is building check dams along stream channels to capture and prevent mass evaporation of rainwater. It has also installed direct borehole groundwater recharge zones to replenish the aquifer.

The project is carefully monitored with grid system technology to measure many different hydrological parameters, as well as to consistently record localised water levels.

Author

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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