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 the rising cost of living in the UK, many consumers are keeping regular tabs on their spending and looking for ways to cut costs when taking care of and maintaining their homes.
Futures rollover stands as a pivotal concept in the commodities market, signifying the shift from an expiring futures contract to the subsequent contract period. This procedure proves vital for traders aiming to uphold their positions sans physical delivery of the commodity. It entails closing the current contract upon its expiry and concurrently initiating a new […]
Quantum computing will light the way for hackers to identify and attack air-gapped servers — high-security computers once thought immune to data theft — new analysis by the cybersecurity consultants Cystel has revealed.
FXCM Inc has announced that the Business Improvement Order issued by the Kanto Financial Bureau in July 2012 has been lifted for its Japan entity, FXCM Japan Securities Co. Ltd.
Most people don’t want to think about the end of life needs until they are nearing the end of their lives, but the truth is that life insurance is the kind of policy you hope you don’t need for a very long time, but one you are thankful for when the time comes. College students […]
There has been a radical shift in client’s behaviour towards portfolio construction. No longer is there a requirement for costly active portfolios and instead, many would rather opt for passive low-cost investment products. With a range of advisors providing this offering, the market has become fiercely competitive.
Man Group Plc, one of the world’s largest independent alternative investment managers, has entered into a conditional agreement to acquire Numeric Holdings LLC.
If there is a possibility that you may sell your business at some stage in its life, no matter whether that is in 3 years or 30, you need to consider increasing its value. By doing so, you increase your chances of securing a more profitable sale in the future.
Telehealth or telemedicine wasn’t new at the time the pandemic started, but that situation accelerated its implementation and development in significant ways. People can now, connect with health care providers from home or anywhere.
The value of the UK's lakes, reservoirs, marshes, bogs, canals and rivers has risen by more than a quarter in five years according to the first ever analysis of freshwater ecosystems from the Office for National Statistics (ONS).