- Must-knows about ESG strategy that will transform your FinTech service company
- Best ways for FinTech companies to harness an ESG strategy that elevates their overall business journey
- ESG strategy essentials: how to harness opportunities for your FinTech company and business journey
When it comes to environmental, social and governance (ESG) investments, the finance ecosystem is experiencing an ongoing global surge. A recent global study highlighted that the proportion of ESG investors worldwide has risen to 89% – a new record – meaning that ESG strategy has likely turned into a critical piece for any companies making investment decisions.
So, what are the main reasons behind ESG’s rise in FinTech? Get up to speed with the latest on why digial finance institutions across the board, both big and small, are using ESG compliance to increase value with current and prospective investors.
ESG strategy: 3 FinTech services to watch
For ESG FinTech companies to deliver a successful product or service, it’s important to know the latest trends out there. The experts at Star recommend traditional finance and startups focus on these three directions for digital finance solutions:
- Payments: This is one of our favorite spaces for sustainability FinTechs to operate in. Players in the payments sector work on influencing the commerce and spending behavior of customers to adopt more practices, companies and brands that are committed to greater overall sustainability as well as facilitating in the reduction of their consumer carbon footprint. Two great examples are China-based Alipay’s Ant Forest and the UK-based company Meniga. Both platforms offer cutting-edge ESG solutions by encouraging users to lower their carbon footprint based on in-app spending behavior. Meniga challenges its customer base to consider participating in the bank’s CSR activities or embracing new green products; on the other hand, Ant Forest translates users’ reduced carbon footprint into “green energy” points that are available for planting actual trees which customers can monitor using satellite imagery. Forward-thinking companies like these put consumers in charge of their emission behavior, which in turn aids in more people focusing on their personal behavior in contributing to ESG goals.
- Lending: Debt financing is one major ESG strategy that has fully embraced sustainability initiatives. These come in the form of sustainability-linked loans and green bonds which are advanced by large financial institutions–yet the area to focus on is the specialized FinTech lending companies that have developed end-to-end products and lending platforms that address specific environmental, social and governance goals. Two impressives examples here are Mosaic, a financing option for sustainable home improvements, and Carbon Zero, a credit card issuer based in the US that provides B2B options for customers to offset their carbon footprint. Mosaic biggest aim is to make energy-efficient and solar improvements much more accessible and affordable for home owners; Carbon Zero, on the other hand, invests its credit card fee into industry-leading carbon capture and forestry projects rather than environmentally-destructive ones. This illustrates two unique ESG solutions used to engage customers in the digital debt financing ecosystem, with many more possibilities still out there ready for the taking.
- Investing: Wealth and asset management are another top focus area for ESG FinTech companies. Their overall goal is to facilitate better ESG-compliant portfolios for individual investors by either managing their portfolios with a focus creating an aggregate file that delivers measurable ESG objectives or providing a specialized platform to access to ESG-driven investments. Arnie Impact, for example, provides both B2C and B2B options for customers to divest from harmful companies and redirect investments into positive ESG-focused funds and businesses. For anyone trying to enter this space, the key is to design customized and pre-built portfolios that zero in on ESG investments that are aligned with with the financial goals and personal values of your individual client base.
FinTech services for a new era
No matter what continent, FinTech consulting services offer a much needed end-to-end development strategy to deliver innovative products. Star digital finance experts, in particular, specialize in collaborating and building groundbreaking FinTech ventures that incorporate the latest ESG strategy. Explore Star’s cross-industry services that meet the needs of both startups and the world’s biggest enterprises.