How Scotland’s Fintechs plays a role in saving people and planet

The most recent IPCC report has shown us how much we need to change to keep the warming of our planet below 1.5º. Climate change is no longer in the future – it is now. Heatwaves, droughts and floods are already exceeding plants’ and animals’ tolerance levels and with 80% of people in the UK being concerned about the warming climate, the appetite for making changes that positively impact our futures is there.

All eyes have been on Scotland since COP26 was held in Glasgow last year, and the coverage and the attention made it clear that Scotland must do more to become a climate and social leader. While there have been changes it is clear that they are too incremental, that a radical overhaul is not yet here. The will for change is there though ”“ especially amongst Scottish people.

Scotland has a reputation as being socially and environmentally progressive ”“ they are ahead of the rest of the UK in the legally binding target to hit net zero, co2 emissions are already half of what they were 30 years ago. At the start of 2020, Scotland was already creating enough renewable energy to account for 97% of total gross energy use in the country. Socially, also, Scotland is setting an example ”“ with free university education, fantastic baby boxes for every newborn and the new young carer’s grant.

Scottish Fintech has been a fast-growing industry since the beginning of the pandemic; there were 119 in March 2020, and there are now almost 200. With the analysis of our cluster as being positive and vibrant’ in the Kalifa review, along with the fantastic collaboration between small and large companies in the Fintech sectors in Scotland, it is no wonder that Scotland has become a hub and a leader in the industry. This brings with it the responsibility to build environmental and social governance (ESG) into our organisations ”“ this is much easier than trying to retrofit later on.

Some Scottish Fintech organisations that are working to be changemakers in society include Iceni Earth (The Experian of Nature) – which help landowners assess their land and give them a biodiversity score, along with clear instructions on how to improve this score. A lot of Scottish Fintech is also focused on social inclusion, with HI55 helping people get access to their pay more frequently and when required. Inbest is using data capture and analysis for good, helping people who are entitled to benefits receiving them. These are just a few examples of fintech organisations that are using their skills to bring benefit to people and the environment, as well as helping people feel empowered to impact the biodiversity of their land, or simply their personal finances.

Fintech has the opportunity to help customers take control of aspects of their lives, using data to see and control their finances and investments. This has been shown to be vital in keeping eco-anxiety (the chronic fear of environmental cataclysm) at bay. This is vital if we are to keep activated, moving forward and not frozen in fear. With all eyes on Scotland, the time to prove they are the social and climate leaders we know they can be is now.

However, there is still plenty of work to be done and the changes that have been made so far could be described as modest. While it is possible to hit net-zero targets, it has been recognised that this will take a radical change in every part of Scottish lives and businesses. But there is the drive to make that change ”“ Scotland has a socially responsible culture, environmentally thoughtful perhaps because of the strong connection to the fantastic landscape.

Gihan Hyde is the award-winning communication specialist and founder of CommUnique, an ESG communication start-up.

She has been implementing ESG campaigns in eight sectors, across six countries over the past 20 years.

Her campaigns have positively impacted over 150,000 employees and 200,000 customers and have closed over £300m in investment deals. Some of the clients she has advised include The World Health Organisation (WHO), HSBC, Barclays, M&S, SUEZ, Grundfos, Philip Morris, USAID, and the Saudi Government. 

Get in touch with Gihan through LinkedIn or Twitter @gehanam.

Global climate tech investment more than triples, but could be better targeted to cut emissions

In December 2021, PwC Global released the State of Climate Tech report. The analysis examines how investors are improving both climate impact and commercial returns through the emerging asset class of climate technology, helping to keep the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius within reach.

This represents an increase of 210% from the US$28.4bn invested the year prior, with 14¢ of every dollar of venture capital investment now going to climate technology. PwC’s State of Climate Tech 2021 reports that where the investment is lacking is in addressing the largest contributors to global emissions. From the 15 technologies investigated, the top five technologies, which represent more than 80% of emissions reduction potential by 2050, received only 25% of the climate techinvestment between 2013 and H1 2021.

Emma Cox, Global Climate Leader, PwC UK, said: “The world has 10 years to halve global greenhouse emissions if we are to have hope of achieving net zero by 2050. Innovation is critical to meeting the challenge and the good news is that climate tech investment is up significantly across the board. However, our research has found there is potential to better channel and incentivise investment in technology areas that have the greatest future emissions reduction potential. This raises the question of why these sectors are missing out ”“ are investors missing a value opportunity or is there an incentive problem that needs the attention of policy makers?”

To find out more about PwC’s Climate Tech report, please contact Jason Higgs, Partner, PwC jason.c.higgs@pwc.com

Climate FinTech consumer products

The FinTech sector has an important contribution to make in reducing emissions, achieving net zero agendas and enabling climate action. The trending area of Climate FinTech encapsulates this and presents opportunities for new products and services aimed at corporates and consumers. With the need to tackle climate change already an urgent demand on society and COP26 taking place in Glasgow in November, the subject couldn’t be more topical.

Rise, created by Barclays, has recently published the latest edition of our Insights report, which focuses on this area. Here we take a look at developments in the consumer space.

But first”¦ what factors are enabling Climate FinTech? Climate change is the massive driver but, beyond this, three things impact companies’ ability to deliver innovation and add value:

Data ”“ New sources of, and ways of treating, climate-related data are being discovered and applied by FinTechs like Net Purpose, YvesBlue and Nossa Data, an alumnus of the 2021 New York Barclays Accelerator, powered by Techstars.

Policy ”“ Emergent government policies and standards addressing climate change present challenges for organisations but opportunities for FinTechs. We’re unlikely to see a single, globally recognised data standard emerge, so being able to compare standards and investments across international markets at the right level of granularity will bring transparency.

Technology ”“ Blockchain is perhaps most relevant to Climate FinTech. It’s a vital enabler in tracking the highly connected world of carbon emissions and energy consumption. Other emergent technologies include 5G and IoT.

“I see significant opportunities for innovative, fast-growth companies that are developing financial technology in supporting the transition to net zero,” writes Sasha Wiggins, Group Head of Public Policy and Corporate Responsibility at Barclays. “It’s by collaborating with business and technology teams within banks that FinTechs can understand the real-world possibilities and turn ideas into practical solutions”.

How can data, policy and technology be applied to address the needs and desires of consumers, who are increasingly adopting greener habits and looking to make more sustainable financial decisions? Here are a few FinTech companies with some impressive answers:

• Aspiration has a green take on the shift toward digital banking that fosters consumer action and enhances the trust between customers and banks. Their ‘Sustainability as a Service’ platform offers ways for individuals and businesses to align their financial needs with their values.
• Envaluate applies research-based behavioural economics, and works with banks to create new technology that provides transaction-level analysis and tips to help lead a greener life.
• OpenInvest is turning the traditional product-centric model of investing on its head, and mainstreaming a socially responsible model that helps individuals seek ethical ways to invest.
• Cushon gives people a more active say in how their pension investments are made, and demonstrates how pensions play a role in the fight against climate change.

Take action

You can read what these and other companies have to say about Climate FinTech in the Rise Insights report, which also contains a more in-depth analysis of the above enablers, and articles on how FinTechs are supporting markets’ adaptation in the areas of loyalty peer-to-peer, energy trading, embedded carbon removal and the impact of sustainability in the insurance sector.

If you’d like to learn more about how FinTechs can work with large organisations on Climate FinTech opportunities, attend one of Rise’s enterprise engagement workshops.

Barclays’ ambition to be a net zero bank by 2050 includes taking action like embedding climate impact into financing decisions. Read how the bank’s climate dashboard measures financed emissions’ to support decision making.