For Sharma , these fintechs will play a vital role in the future to predominantly help financial institutions achieve net zero goals , providing the “ infrastructure and technology solutions to bring transparency on emissions across portfolios , assess and mitigate risk in individual transactions and support investment decisions .
“ Net zero-focused fintechs can also help financial institutions comply with regulatory requirements by providing tools for robust climate and transition risk disclosure and reporting , providing financial regulators with the tools to monitor and test compliance along with data analytics to support policy insights and decision making .”
Perhaps most critically , it will be the demand from consumers that drives the proliferation of climate-based fintechs on the market . Sharma sees this as another opportunity for green fintechs to expand their services . “ Fintechs can equip consumers with tools and insights ”, he says , “ helping them gain an understanding of how consumption affects climate change and support behaviour changes .”
He adds : “ For example , an open banking platform that enables consumers to see the carbon impact of their spending in real-time . Personal finance and wealth management tools can enable individuals to contribute to net zero by enabling them to invest their money in sustainable assets .”
It is also another area where fintechs can “ leapfrog ” the challenges legacy institutions face , driving industry-wide adoption of sustainable services according to Clowd9 ’ s Vaghjiani .
Fintech : Will net zero truly be reached ? The potential for growth in the climatebased fintech space is growing alongside
130 November 2023