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How Fintechs Can Contribute To The World’s Sustainability Goals

A new report jointly produced by McKinsey & Company, Elevandi, and MAS was recently released, showcasing how fintechs can contribute towards a greener future

SFF 2022 insights: Enlisting fintech to help create a sustainable future, jointly produced by McKinsey & Company, Elevandi and the Monetary Authority of Singapore (MAS) — showcases how fintechs can contribute towards a greener future. The report draws on insights shared at the ESG track of the Singapore Fintech Festival 2022

The report draws from the environment, social, and governance (ESG) track of the Singapore Fintech Festival 2022 (SFF 2022) that took place between November 2 to 4, 2022 and includes insights from respectable leaders present at SFF 2022. These include Anthony Tan, Co-Founder and Group CEO at Grab; Eric Lim, Chief Sustainability Officer for United Overseas Bank; Helge Muenkel, Chief Sustainability Officer for DBS Bank; Mark FitzPatrick, CEO at Prudential; Nikhil Rathi, Chief Executive of the UK Financial Conduct Authority; Ravi Menon, Managing Director of MAS; and Sonam Wangchuk, Founder of Himalayan Institute of Alternatives.

Key insights from the report:

  • The move to a net zero global economy by 2050 will require the greatest reallocation of capital since World War II, coupled with a massive influx of financial innovation.
  • Data remains crucial in supporting the innovation of fintechs: Data collection and analysis are crucial factors in whether fintech innovation can successfully support sustainability goals. Data is necessary to make informed decisions, evaluate market participants, and assess the success – or failures – of initiatives. Yet good data remains a scarce commodity.
  • Fintechs are already playing a role in driving the sustainability agenda. “Fintechs for Good”, i.e. fintechs that embed an ESG agenda into their core product portfolio, operations and mission, attracted US$2.1 billion in funding in 2021, and this trend is expected to continue. As sustainability efforts proliferate, a key challenge for all companies would be to demonstrate real impact and self-protect against greenwashing.
  • Encouraged at least in part by increased concern for climate change, regulators around the world are taking a keen interest in sustainability claims by corporations, particularly their reporting activities.
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One of the most pressing issues highlighted was sustainability, particularly the critical need to prioritise efforts in this area, both by the fintech sector and the rest of the world.

Commenting on the launch of the report, Pat Patel, Executive Director of Elevandi said, “Net zero is a massive mountain to climb, and reaching the critical sustainability goal will test society’s capability and commitment. The McKinsey Global Institute has provided a steep estimate – that US$275 trillion in capital spending between 2026 and 2050 would be needed.

At Elevandi, we firmly believe that an active dialogue and collaborative projects between the public and private sectors will make a difference. In the first half of 2023, we will continue to bring policymakers and regulators together with corporates, startups and investors to progress frameworks and concrete initiatives. We’ll be convening key global leaders in Rwanda to focus on inclusive and sustainable fintech projects and Switzerland to focus on technology and data frameworks required to move the sustainability agenda forward.”

The SFF 2022 insights: Enlisting fintech to help create a sustainable future report is one of the seven reports Elevandi will be releasing with consultant partners, which include topics such as Web3 and digital assets, banking for business, balancing innovation and regulation, the future of fintech in growth markets, and how fintechs can become more resilient to volatile market conditions.

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Source: e27

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