Sustainable development is a hot topic in the Fintech industry today. But the topic of sustainability is anything but new.
The earliest formulations of environmentally sustainable development can be found in the 1980’s World Conservation Strategy for Conservation of Nature and Natural Resources that was presented by the United Nations (UN) Environment Programme, the World Wildlife Fund, and the International Union.
Most people associate this concept with the environment, but sustainability can be observed in other contexts too, such as social responsibility and economic development which have been continuously developed until this day.
What is sustainability?
According to the Brundtland Commission, sustainability is all about meeting our present needs without having to compromise the chances of future generations to meet theirs. Or in a more scientific sense, sustainability is the capacity to endure or continue a course without termination.
Sustainability is extremely important because it helps to improve the quality of our lives, as well as the lives of the people of tomorrow, by protecting the environment and preserving natural resources.
Environmental sustainability in Fintech
Many issues concerning the environment have led to new trends in technology and financial management such as climate change, greenhouse gases mitigation, and renewable energy. As such, customers today are increasingly asking for a more sustainable lifestyle with ecological and environmentally-friendly products.
According to a report by Nielsen Media Research, 66% of global consumers are willing to pay extra for environmentally friendly products. This has been a great opportunity for firms to set up their green marketing and be more socially responsible.
The Fintech industry, like many others, also has great potential to become environmentally sustainable.
Fintech refers to the latest technologies that are used in innovative financial products and services. As one of the most significant markets in recent years, Fintech is capable of collaborating with different types of institutions from different industries.
Fintech is all about improving, developing, and automating financial services to ease financial activities for customers, firms, and investors. With its transparent, efficient, and most importantly user-friendly services, Fintech is a key driver for financial and sustainable development.
How Fintech plays its part
Fintech has surfaced as an alternative to traditional financial institutions as it can make financial businesses more sustainable through promoting green finance.
A lot of progress has been made in the areas of Fintech and sustainability, such as finding ways to mitigate climate change and achieving a balance sheet with a smaller carbon footprint by developing business strategies aligned with responsible investment principles and international standards.
The recent pandemic has forced many businesses to rethink traditional models and rely more on technology and sustainability. But the Fintech industry has been consistent with the Environmental, Social and Governance (ESG) world and is constantly developing more environmentally-friendly financial systems to become more inclusive, circular, and ESG-resilient.
Since 2016, the UN has been studying the relationship between Fintech and sustainable development. And we know that digital finance and Fintech both play a part in the Sustainable Development Goals (SDG) achievements-they focus on the allocation of existing financial resources in business models, incentives, regulations, and policies, and redirect them globally and in individual countries to allow for more SDG-related finances.
New technologies such as blockchain technology and artificial intelligence (AI) can also be used in the sustainable finance sector. Blockchain technology rewards contributions to lower carbon emissions, thus creating incentives for more solar panel usage. AI and big data analytics are utilised to collect and process information on companies’ environmental behaviour.
Thanks to the environmental sustainability in Fintech that allows farmers to obtain funding through crowdfunding, digital marketplace, and digital payment systems, agricultural businesses can now become more sustainable. This solution has offered a more transparent and resourceful platform for farmers, landowners, investors, and consumers to obtain funds.
It is apparent that through promoting green finance and sustainable development, Fintech is capable of transforming financial businesses to be more resilient and sustainable. Fintech itself is environment-friendly as it reduces asymmetric information for investors, supports sustainable lifestyles, encourages efficiency, and values nature’s resources in this circular economy.
What does this have to do with TranSwap?
The financial sector plays a key role in this fight against climate change. At TranSwap, we recognise our responsibility to constantly improve, develop, and automate to offer more sustainable services.
To play our part in shaping a nation that is economically, environmentally, and socially responsible, we have successfully organised our first beach cleanup event this year and gave the gift of compassion to the disadvantaged while supporting community farmers in Cambodia. Our R&D team in the United Kingdom is also constantly innovating and coming up with new ideas for sustainable solutions for our customers.
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