“It’s not easy being green…” These potent words, uttered nearly 60 years ago by renowned philosopher, singer and raconteur Kermit the Frog, are as true today as they were back then. It’s a refrain that perfectly sums up the trials and tribulations of trying to be environmentally friendly in today’s tech-driven world, where firms are trying to balance profit with purpose.
But fintech is one industry that’s leading a charge for a healthier, safer and equitable planet for all. Over the past few years, there’s been an unmissable societal and governmental shift towards environmental, social, and governance (ESG) principles and more ethical business practices across all industries.
Sustainability and responsible business practices are becoming increasingly important to investors, consumers, and regulators alike.
While some carbon-heavy industries are dragging their heels, fintech firms have leapt into action and are fervently integrating ESG commitments and principles into their business models. They’re also shaping the future of responsible investing and financial services.
Fintech players are also showing firms in other industries how to drive sustainable growth through practical action. In doing so, fintech is inspiring other industries to engage with communities to push progress faster and further. After all, trying to foster change by yourself can be a long, lonely journey – collective action with likeminded people working together for a common goal is a far more impactful approach.
Green fintech products and services
A wave of fintech companies have forged ahead by developing products and services that encourage carbon-reducing measures and sustainable consumption. More fintechs are now offering carbon-tracking features that help people to make environmentally-friendly purchases, and offset carbon emissions through renewable energy projects. We’re even seeing the emergence of AI-powered robo-advisors, helping people to align their investment portfolios with ESG goals.
Not only are these green-focused fintechs making a positive difference to the planet, they’re also standing out in a crowded market with a powerful differentiator. And their eco-friendly credentials make them more appealing to potential customers, investors, and even potential employees, who increasingly are opting to work with businesses that align with their own values.
This, in turn, can help attract more investment. ESG credentials are very important to a growing range of would-be investors. They know what ‘good’ looks like, and want to see evidence of it in the companies putting themselves up for investment. Fintechs that can demonstrate clear unit economics, operational efficiency, and sustainable growth strategies are likely to attract more offers of funding.
Successfully implementing ESG initiatives does not come without its challenges. Nobody wants to be accused of ‘greenwashing’ or paying lip service to ESG while continuing harmful activities. Fintechs must wear their hearts on their sleeves and demonstrate genuine and targeted commitment to making positive changes – and follow through with delivering it. That’s why we’re seeing more fintechs pursuing B Corp certification, which verifies businesses that meet the highest standards of ESG performance, transparency and accountability.
Without a healthy planet, there’s no future for fintech
Amid so much geopolitical strife, climate-related natural disasters increasing, and toxic waste being dumped into the oceans on a daily basis, the quest for ESG in action will only become more urgent.
As governments around the world continue to engage with the COP climate change summits and the Paris Agreement, 2025 will likely see even more regulatory pushes for ESG, and fintechs will need to be ready for them. Around the world, various regulators are demanding more ESG disclosures, especially from public companies, corporates and financial institutions.
One example of new ESG disclosure regulations is the EU’s Digital Product Passport, launched in 2024. This will require nearly all products sold in the EU to have a DPP that details compliance, transparency and information on the product’s environmental impact. While it won’t be applicable to digital services, it could potentially impact manufacturers of POS devices, and other physical payment solution hardware.
A common theme for all organisations is trying to keep up with changing standards, regulations and directives. Trying to work out what is mandated and what isn’t, and how to best to implement changes in the least disruptive way, requires constant monitoring and engagement with overseeing bodies like regulators, stakeholders, and customers. Prioritising what actions to take first gets a lot easier if fintechs take the time to assign specific teams to monitoring ESG initiatives.
Complacency is not an option. Fintechs have already blazed a trail in launching green financial products and services, along with implementing principles in their own business models. But much more work needs to be done. Without a viable, healthy planet for all, there won’t be one for future generations, never mind the fintech industry.
Partner with a PR agency that shares your vision
Your purpose-driven fintech deserves a communications strategy that reflects your values and amplifies your impact. A specialised fintech PR agency can help you craft compelling narratives, build trust with stakeholders, and position your brand as a leader in ethical innovation.
Get in touch today to find out how a partner who understands your mission can drive your message forward.