Fintechs are in a unique position to build Environmental, Social and Governance (ESG) criteria into the fabrics of their businesses. As a relatively new sector, there is an opportunity to mould the future of fintech, whilst nudging other financial services to make socially and environmentally positive changes.
We get there by taking baby steps, making small changes, addressing the areas of our business where we have the greatest opportunity for change. And while it is important to focus on each achievement and be proud of each small change, sometimes it is worth just taking the time to get inspired. Here are some of my favourite ESG standouts in the financial and technical world.
Disclaimer, I have no affiliation with the below organizations, I am just a fan of their work, don’t get me wrong the below initiatives are not new because they have been implemented by other organisations within the retail, fashion and FMCG sectors. What’s impressive is the use of technology in saving people and planet.
Starling is a branchless, paperless bank, the first challenger bank of its kind in the UK. They have prioritised their people and planet credentials from before the beginning – turning down funding from a potential backer who had pled guilty to a serious crime, ensuring they do not build bias into their tech, ensuring an equitable workforce with women filling 40% of senior roles, and partnering with Trillion Trees to plant 2014 trees – plus an extra one for every person who is referred to Starling by a friend.
Tred is a green debit card, made from recycled ocean plastic, is the UK’s first green debit card that allows users the all-in-one ability to track, reduce and offset their carbon footprint as they spend, while also contributing to reforestation with every purchase. The Tred app calculates a user’s personalised carbon footprint based on their spending, and a tailored monthly subscription then allows users to offset their exact carbon footprint by planting more trees or contributing to other climate change mitigation projects.
Fairphone is a technology company that has pushed the tech sector to take a look at the way they build, source and trade – paying all factory workers fair living wages, tracing and publishing their entire supply chain. Its thanks to Fairphone that it is now possible to source Fairtrade gold. Looking after people and planet is built into the core of what they do, and they are upfront and honest about every challenge they face.
Examples of the ESG campaigns these companies and others have implemented can be found here on our Aqua Paper
Almond helps individuals make better choices about where they shop. Consumers can ‘buy better, act better and offset the rest’ with confidence as they have strict criteria for companies to be listed on their app and to earn their badges for being carbon neutral, sustainably sources or circular in nature.
Triodos is another organisation that has had people and planet at the core of everything they do from the beginning – which was 1980 for them. They are completely transparent about everything they invest in, with high criteria – firstly filtering in companies that are contributing to the United Nations Sustainable Development goals, and then filtering out companies that are involved in sourcing conflict minerals, violate their employees’ rights or produce or retail energy from fossil fuels
Pensionbee offers both a fossil-fuel-free pension plan and a Shariah plan, which invests only in Shariah-compliant companies. This allows customers to decide what is most important to them. They have also updated their ethical plans; based on feedback from customers and their increased ability to index companies. This highlights how important it is to keep improving and pushing the companies we invest in to do better, using the new tools available to us to make better choices.
ClimateHero allows users to calculate their individual climate footprint. The interface asks users about aspects of their lifestyle and habits and then calculates their climate footprint: it then offers ways to reduce this climate footprint and finally an opportunity to offset any carbon that can’t be reduced. It’s a super simple app that lets people dig into their habits in a non-judgmental way and gamify their carbon reduction.
Wealthify is an investment app that offers an ethical plan for investors. The algorithm can be set to whichever portfolio allocations you prefer – they recognise that ethical means different things to different people. All their funds are designed to avoid funding deforestation, gambling, tobacco, adult entertainment, and weapons; they also allow positive screening so that investors can choose where they want to make the most difference.
All of these organisations are doing thorough work to push structural changes into the financial and technological industries; however, a key takeaway here is that none of these companies is perfect or claims to be perfect. In fact, there are several holes in their communication campaigns such as
But what they are doing is that they are making the changes that are the most applicable to their business and owning their challenges and celebrating their achievements. They are all getting there one small step at a time.