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More people are caring about their impact on the environment. There is a growing demand for companies to act responsibly, which will influence consumers’ decisions to support businesses. There is no better time for companies to reflect on how their practices impact climate change—environmental consideration is now a necessity across all industries—including fintech.
Along with the current surge of interest in environmental, social and governance (ESG) investing, many companies are starting to make serious efforts to adopt net zero pledges and develop new solutions to address climate change. In addition, there is also growing concern around ‘greenwashing’, where businesses make false claims about environmental practices. Regulators such as the Australian Competition and Consumer Commission (ACCC) have become more critical and vigilant on businesses that do not live up to their promises and provide misleading information. The ASICS (Australian Securities and Investments Commission) has even issued its first-ever greenwashing fine, which is an indication of more enforcement action to follow.
When done authentically, sustainability practices can present unique opportunities for growth, innovation, and investments for your company—moreover, they can set an example for others to follow—strengthening their brand reputation along the way. There are many ways that fintech companies can meet the needs of ESG and sustainability practices. One of the key opportunities lies in the power of connectivity and automating processes through technology, such as digital online payments—but there is also a multitude of other factors to consider.
Look into the gaps in the societal issues that the financial sector can help to address, how your capital investments can be used towards raising awareness of climate change, or ways that the industry can practice a more transparent way of financial and economic reporting.
Reducing overall emissions associated with your business is a surefire way to show your customers that you genuinely care about the environment, and are taking action to improve the planet. This goes further than just setting a target for reduced emissions, but being able to deliver proof to customers and investors that you are taking action to fulfill this promise, such as the release of quarterly reports that indicate your current emissions rate. Another step you can take to carefully consider ESG factors is to create a roadmap that includes donations to, actions or interaction with an environmental organization that is of interest to you.
In light of the collapse of REDcycle, advocates are putting the responsibility on manufacturers and retailers for the huge amount of plastic created. In a time when greenwashing and recycling are more prevalent than ever, with each Australian using around 130 kg of plastic annually (less than 12 per cent of this plastic ends up recycled), businesses need to take matters into their own hands and start making authentic , impactful commitments. For example, a unique approach to partnerships can place purpose truly at the heart of making an impact on climate change. WLTH partnered with Parley for the Oceans to conduct high-impact clean-ups in the Whitsunday Islands, and our first of many voyages intercepted a combined total of 630 kilograms of debris across a total area of 11,500m2 of beach and coastline. We also recently launched a VISA debit card with G+D made from upcycled and intercepted marine plastic, and absolutely zero virgin plastic – a first of its kind in Australia. As our business is focused on raising awareness of and protecting Australia’s waters and coastlines from pollution, it made sense for us to partner with a like-minded organization.
For fintech companies wanting to start their environmentally-conscious journey, looking into what sector of the environment you’d like to focus on, and using that as an indicator of which businesses you’d consider partnering with can be highly beneficial. Taking action alongside credible organizations with values similar to that of your own company is a great indicator to customers, investors, and other businesses that you are taking ESG seriously.
In terms of payment methods, fintech can introduce new features such as monitoring systems that enable customers to track where they are spending their money and helping set ESG goals. Examples of features could include chart tracking payments on electricity bills and turning this into an estimated carbon footprint, or allowing the user to set a limit on where they spend their money and have this align with environmental goals – such as a limit on spending at fast – fashion companies.
A passion for the environment is critical for the fintech industry and will reflect well in your business practices. In order to be a successful fintech that considers ESG factors, you need to authentically care about climate change, and not jump on the bandwagon in order to keep or attract new customers. This betrays the trust and confidence of the consumer and can hinder meaningful action. Be determined and make a difference in climate change by education and changing behaviors – starting from practices within the organization and consumers.