In the Marvel cinematic universe, at one stage of the saga the Avengers unexpectedly found themselves divided and fighting among each other. Fans were left to choose between “Team Captain America” and “Team Iron Man”. Divisions were put aside for the final two installments in the film series, and a united front was able to save Earth and the Universe.
In the modern financial landscape, ESG and FinTech have both been popular trends and defining catalysts for change, as well as increasingly prevalent targets for investing. As far as I can tell, both of these movements were developing for the most part along separate paths. People and companies have essentially been forced to select where to focus their time and resources – “Team ESG” or “Team Fintech”.
Proponents of one group or the other can successfully argue about the potential for their team to disrupt the status quo and to make lasting changes that can improve our lives and businesses. Think of the impact there would be if these teams could work together.
We are already seeing positive trends in this direction. Companies and governments can use blockchain technology to monitor recycling processes and automate ESG reporting. AI can be used by institutional and even retail investors to access swathes of data in order to track companies’ ESC scores on a regular basis.
Stripe has been one of Fintech’s most enduring successes. Well, now Stripe is getting in on the ESG trend by rolling out “Stripe Climate”. This tool will help Stripe’s commercial users to donate funds to environmental technology research that is designed to reduce carbon footprintes. And these users can then use Stripe Climate to advertise their efforts in order to attract customers that feel strongly about environmental issues.
How about a savings account that can fight climate change? We’ve got you covered. One firm has a savings account that plans to use deposits from savings accounts to invest in clean energy. Maybe you prefer to have your credit card put your “green” beliefs into action. That’s possible, too! There’s even a company that can track your carbon footprint, and that donates part of its card revenues to carbon removal causes. Another card company will let you round up amounts to a whole figure and the change can be donated to organizations that plant new trees.
If you check on LinkedIn, you can even find several firms that have “ESG Tech” as part of their company names. This a real economic force whose impact can be felt in different ways. Retail customers are following their consciences, and shareholders and investors are following suit. If a business is judged to be non-sustainable, it may struggle with capital raising and other projects.
By my reckoning, the best way forward is to combine the different ESG and Fintech projects as often as possible. We can and should use our resources to implement positive changes that are attainable via both of these dynamic sectors. By working together these teams can become a force like the unified Avengers that is larger than the sum of its parts and is capable of saving the Earth, if not the entire Universe.
Sources:
- Featured Image – Demonstration London – https://www.piqsels.com/en/public-domain-photo-ovtqz
- https://fintechreview.net/esg-and-fintech-a-perfect-match-made-in-heaven/
- https://www.theedgemarkets.com/article/fintech-democratising-esg-investing
- https://www.forbes.com/sites/nikmilanovic/2021/02/18/climate-fintech-is-coming/?sh=6ce146522b55