Fintechs worldwide bring innovative ideas, green financial products, and services for their customers to reduce their carbon footprints.
Climate change has evolved throughout the earth’s history and is considered a constant threat. Humankind has always wished to put an end to this threat and save their home: The Earth and now the fintech sector has also joined hands in combating climate change with its innovative methods. Even though it is an unusual coalition, but there is a lot to explore.
Climate Fintech — A Prelude
Climate fintech is referred to as the digital financial technology catalyzing decarbonization, which simply means to make the financial sector greener and eco-friendly by reducing the carbon footprint and carbon emission.
Also known as Green Fintech or Sustainable fintech, a combination of climate, finance, and technology.
Green Tech is rapidly growing and has been getting the spotlight as climate activists have been very vocal in advocating a climate-conscious lifestyle with green habits. This has led many fintechs to integrate and build climate-focused products and services in recent years.
Combating climate change in action
Fintech is actively doing its part by providing consumers with paperless and digital financial experiences. They are also driving many innovations and creating opportunities to treat climate-related data and services.
Simultaneously, other financial companies are rethinking their strategies to reduce carbon footprint and convince their users to adapt the same. New entrants now focus on financial products that offer value to all stakeholders and achieve zero carbon emission.
If you noticed, the years 2020 & 2021 had numerous climatic-based financial investments in decarbonization. Cutting-edge technologies like Artificial Intelligence (AI), Big Data, Blockchain help fintech provide transparent financial services and bring forth unique use cases for their users.
It further helps companies track and offset their climatic impact by reducing greenhouse gases in the atmosphere. Moreover, by monitoring carbon emissions and energy consumption, fintechs are working towards persuading consumers to combat climate change. As a result, people are now expecting great financial inclusion that covers the banking ecosystem as well.
How is Climate Fintech taking a step further?
As fintechs are an integral part of combating climate change, several innovations are now being introduced to mitigate the global threat.
Climate-focused digital point-of-sale
Fintechs allow consumers and businesses to transfer a part of their proceeds to reduce carbon footprints and focus on clean energy through online investment apps. Consumers are also now given clear visibility on what they spend their money on to lead a climate-conscious lifestyle.
Digital banking
Wooden and plant-based payment cards have entered the market that automatically tracks the carbon footprint based on the transaction data. In addition, many fintechs are now working with digital banks to create new technology that provides transaction-level analysis and tips to lead a greener life. Based on this tracked data, fintech nudges consumers to follow climate-conscious lifestyles.
Emission APIs
Fintechs have now developed APIs that help businesses launch carbon-neutral products and services that offset carbon emissions with sustainability tracking.
Climate-focused Investments
The wealth and investment platforms offer transparency and optimize their portfolio for greenhouse gas emission reductions, deforestation, fossil fuel divestment, etc.
Blockchain for carbon markets
Carbon markets bring transparency by offering tokens through blockchain technology to reduce the impact of carbon emissions by purchasing carbon credits.
In a nutshell, climate change can be controlled with these technologies driving the financial services to build a sustainable future. Also, the pandemic has further fueled digital inclusion in everyday financial requirements, pushing consumers to continue the same in the future. It is exciting to watch out for a climate-focused lifestyle, and we should turn the tide by prioritizing and making it a green planet for future generations to relish. Also, let us think through and bring more innovative ways to put an end to the ongoing climate threat.
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