With Sustainable Financing on the Rise, Expert Advises How Fintechs Could Step Up ESGs Activities
An increasing number of businesses are focusing on how to embed ESG (Environment, Social, and Governance) goals into their strategies. As the notion of sustainability is gaining more ground in the finance sector as well, Marius Galdikas, CEO at ConnectPay, has shared how fellow fintechs could incorporate ESG practices into their business and what impact it could have on fuelling further growth.
Scroll
Home » Articles » With Sustainable Financing on the Rise, Expert Advises How Fintechs Could Step Up ESGs Activities
With Sustainable Financing on the Rise, Expert Advises How Fintechs Could Step Up ESGs Activities
Embedding ESG goals could help fintechs become more immersed in sustainable banking, thus improving their market resilience.
An increasing number of businesses are focusing on how to embed ESG (Environment, Social, and Governance) goals into their strategies. As the notion of sustainability is gaining more ground in the finance sector as well, Marius Galdikas, CEO at ConnectPay, has shared how fellow fintechs could incorporate ESG practices into their business and what impact it could have on fuelling further growth.
ESG investing has skyrocketed over recent years, as more and more investors have started to consider the impact of their money. This shift in attitude is already well-reflected in the market — last year companies with better ESG ratings hadgreater returns in almost every month. The finance sector is no exception, with major players boosting their financing goals totrillions of dollars. In the US alone, six largest banks in the country havepledged to eliminate all financing activities related to greenhouse emissions by 2050.
According to Galdikas, although fintechs may not have massive budgets to finance low-carbon initiatives, it should not be a limiting factor to support ESG goals. In fact, neglecting the subject may result in decreased company value and missed opportunities.
“First of all, ESG issues are becoming more important for stakeholders looking to invest long-term. Neglecting the topic may lead to a poor ESG “risk score”, which is closely monitored by business partners and investors. This could negatively impact the company’s reputation, followed by decreased market value, as well as losing the edge against the “more green” competitors,” Galdikas explained.
He also noted a few strategies for how fintechs could become more immersed in sustainable banking and improve their market resilience.
“One of the ways could be setting up “green pricing” for ESG-driven businesses, as in offering tailored pricing options for your services. It could be set case-by-case, taking into consideration how the company operates and what strategies it uses to achieve their business goals. Making sure that they’re consistent in their actions will allow you to sift out potential fraudsters as well,” Galdikas advised.
“Also, take time to overview your current client portfolio. ConnectPay works with digital-only businesses, thus large scale manufacturers or other industries, contributing to high carbon emissions, are not in our client base. Yet fintechs with a wider scope of customers should re-evaluate if businesses they are working with operate with ESG-values in mind.”
Another way to support the sustainability movement is to reorganize in-house processes with a goal to lessen CO2 emissions, for instance, by reducing business trips. “Albeit it may not be as relevant with the ongoing pandemic, which put a halt on international travel, but sooner or later the world will recover, thus it’s important to keep this in mind for future reference.”
While the Environmental aspect usually retains the main focus in the context of sustainability, Social and Governance criteria need to be approached with the same determination. In Fintech, this could be addressed by tackling the gender gap. At the moment, women make upless than 30% of the industry’s workforce. At ConnectPay, however, the team is split almost equally in half, having 48% women and 52% men.
“Diversity in the team inspires new ideas, improves decision-making and leads to higher overall performance, all the while contributing to better integration of ESG goals,” the expert concluded.
View the latest issue of the Wealth & Finance digital magazine which features business profiles of leading industry insiders who are thriving in the finance and investment sector.
With UK Government’s Making Tax Digital (MTD) deadline less than two months away, the race is on for UK organisations to understand the impact of MTD on their business. MTD could mean a significant shift in operations for some organisations, which means they need to act now in order to get themselves in order for the impending deadline.
The financial services industry is in the throes of a new era. In January, the biggest overhaul of its operations in the past decade was implemented – the second Markets in Financial Instruments Directive, or MiFID II for short. MiFID II had
Imagine a world where your stock portfolio is like a self-driving car, navigating the twists and turns of the market without you needing to keep your hands on the wheel. This isn’t just a daydream; it’s the reality for many investors who leverage the sophistication of trading software for automated stock trades for a hands-off investing experience […]
You don't have to be born with a silver spoon to build wealth throughout your life. You don't even have to be a financial expert. A few simple principles can help you acquire and build wealth over a lifetime.
Bel Brands USA is the U.S. subsidiary of Bel Group, a family owned company (based in Paris, France) and the world’s third largest manufacturer of branded cheese with a portfolio of 30 international and local brands distributed in 130 countries worldwide. We got in touch with their Didier Aziza, Chief Financial Officer of Bel Brands USA, to find out more about their company and his financial initiatives reaped tremendous rewards for the company.
Dutch Trading venue, TOM (The Order Machine) now offers best execution in Exchange Traded Funds (ETFs). The product scope now consists of equities, options and ETFs.
The mosaic that makes up the lives of modern wealthy people is constantly shifting and being redesigned as wealth is distributed across a more diverse range of ages, genders and nationalities than ever before. What drives wealthy people around the world has never been so complex. For wealth advisers, this means greater difficulties and greater opportunities.
When it comes to our finances, we know all about budgeting for our monthly outgoings. Your rent or mortgage, electricity, gas, council tax, and any other bills you might have are regularly occurring and straightforward to budget for.
Your 20s and 30s are a time of significant life changes, career milestones and financial decisions. While these years offer exciting opportunities, they also come with money challenges, including debt. Explore what you need to know about the common types of debt and how to manage it responsibly.
Buying a home is one of the biggest investments we make in our lives. However, while the average house price in the UK is valued at £249,633, the cost of mortgages among other factors means that the total cost of the home-buying process can vary between individuals.