Financial technology, popularly known as Fintech, is a technology that enhances and automates financial services for customers. On the contrary, Green Fintech is a fairly new term and indicates any program, company, or firm influencing the environment. The positive influence involves reducing carbon emissions and improving the ecosystem.
In Green Fintech, technologies such as data analytics, the Internet of Things (IoT), blockchain, and Artificial Intelligence (AI) are used with effective business models to reduce environmental impacts. Many companies and organizations are working to achieve a sustainable environment by planting trees and investing in alternative fuels.
The motive of Green Fintech firms is to provide exceptional services to their customers. In this article, we will highlight the facts that help to shape the fintech market. Let’s go.
How is Green Fintech Shapes the Financial Market?
Advantages of Green Fintech:
There are various advantages to adopting Green Fintech by an organization. Some of them are as follows:
There is a possibility that by adopting Green Fintech, the supply networks may improve and become more transparent. The partnership between IBM and Maersk is the best example of this case. Both companies formed a partnership in 2018, and the plan was to offer secure and efficient solutions for international trade using blockchain technology.
Changing People’s Life:
Green Fintech may help in improving people’s life. In this global economy, a person’s financial history is traceable through digital or electronic credentials. As a result, a person can track their finances effortlessly. Some new startups like Tarfin and Agro.Club are working specifically for the farmers of Europe to provide them with financing solutions and make them more independent.
Property Rights Management:
In many countries such as Ghana, Honduras, and Rwanda, blockchain has been utilized for selling land titles. As a result, transferring intellectual property rights has become a bit easier and more secure. Green Fintech is broadening the scope of financial services.
Some Startups in Green Fintech:
CarbonChain is an emission management platform that allows retailers to calculate, analyze, and reduce carbon emissions throughout the supply chain. Founded in 2019, the AI-based startup estimates the carbon footprint of a company’s various portfolios and determines the one that causes excess carbon emission.
Moreover, the startup also offers carbon risk exposure assessments for its users. Multiple industries that deal with mining (steel, copper, and aluminum), oil or natural gas, and agriculture use CarbonChain to check carbon emissions and reduce them. The startup aims to avoid the worst effects of climate change.
The money put in savings, debit, or mutual funds by the people is invested by the banks in various industries. However, banks invest heavily in big corporations like coal power, armaments, and others that have a high carbon footprint and cause more damage to the environment.
Tomorrow is an exceptional bank that allows their client to invest money in specific climate change projects. Inas Nureldin, Jakob Berndt, and Michael Schweikart founded Tomorrow in 2018 to use money as a force for good. Tomorrow Zero is a premium account and offers its clients to invest in climate change projects like safe water in Uganda, smallholder development in Peru, and biogas plants in Vietnam.
Any Fintech technology that works combines business value with environmental conservation is known as Green Fintech. As the concern about the environmental crisis is increasing among people, more and more Fintech firms are initiating to develop technologies that can combat this issue. These firms’ goal is to reduce greenhouse gas emissions or alleviate the adverse effects of environmental degradation.
Moreover, startups like CarbonChain and Tomorrow work to achieve the dream of a net-zero economy. They aim to save the planet by reducing carbon emissions as much as possible. Thus, Green Fintech can bring positive change in the fight against environmental crises. We hope that you liked our article. Give us your feedback in the comment section, and check out other articles. See you next time!!!