As many sectors pivot towards sustainability, the financial world continues to analyse the role it plays in climate change.
Net zero targets set by the government are demanding change from every industry and each can play a unique part in reaching those objectives.
The fintech revolution has dramatically transformed the sector and has enabled many financial companies to monitor their impact on the environment. Here are some of the ways fintech is helping to build a more sustainable future.
Role of Fintech in Unlocking Green Finance
Financial processes such as consumer banking and lending have become unrecognisable compared to decades gone by.
Banking by post and telephone has become almost obsolete for younger customers who now favour online banking and digital apps. Lending applications can be done entirely online with digital credit reporting and scoring systems.
This has reduced the need for physical correspondence and transportation which was once essential to the whole process.
Fewer journeys to and from financial institutions means reduced emissions and that gets the country one step closer to net zero.
Innovative data analytics and AI systems are helping businesses to analyse their supply chain models to better cope with peaks and troughs in demand.
Optimising this process reduces the disruption caused up and down the chain, minimising the impact of freight and distribution inefficiencies.
Many businesses are also investing in consultations with specialist fintech law firms to advance their understanding and application of innovative systems.
The analytical power of such technologies helps to increase the efficiency of business operations, reducing unnecessary carbon-emitting activities.
Advancements in Blockchain technology are providing the tools for businesses to harness the power of real-time data.
Collecting and evaluating information on energy usage and carbon emissions gives companies the insight to map and manage their sustainability efforts with more precision.
Greater visibility on environmental impacts is key to allowing leaders to make meaningful changes to their processes which can make a real difference in the fight against climate change.
Green initiatives are driving consumers and business owners to reduce their environmental impacts in more ways than ever before.
Collaboration between organisations has never been more important to achieve mutual, national and global objectives.
For example, carbon offsetting schemes provide a convenient mechanism for individuals and businesses to mitigate their own emissions.
Many fintech firms are investing in and offering these to stakeholders, whether that be in the form of sustainable investment portfolios or direct investment opportunities.
Fintech has a large role to play in driving a greener economy, as do many other sectors. Money is often key to change and fintech can influence this like nothing else.