The importance of sustainability is becoming more significant across many sectors and industries, but how emerging payments has adapted to this is still unclear. With new innovations and schemes in place, is green finance really at the forefront of the sector?
in 2018 the UK government issued its 25-year environment plan and laid down legislation to reach net-zero carbon emissions by 2050. This announcement led to many businesses re-evaluating their focus and strategy and putting much more of a focus on sustainability. In the past couple of years, the emerging payments industry has implemented measures to promote green finance and ensure that the industry is taking set actions to focus on environmentally friendly practices.
The Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), The Pensions Regulator (TPR) and The Financial Reporting Council (FRC) published a joint declaration welcoming the Government strategy and set out shared understanding and have taken significant actions in respect of climate change. These four regulatory bodies teaming up to announce a joint focus on green finance was one which made the industry really evaluate their processes and consider sustainability as a key goal moving forwards.
Since the joint declaration was published by the authoritative bodies, there has been a number of initiatives the emerging payments industry has started embarking on to put green finance as a top priority:
- Recent Apps dedicated to ‘green’ (ESG) investments and tracking how spending affects carbon emissions such as Clim8, Cooler Future, Sugi, CoGo.
- TreeCard – powered by Ecosia will plant trees and allow tracking of spending. Ecosia believe financial sector and its ruthless pursuit of profit e.g. funding fossil fuels is in dire need of political reform. They believe ethical challengers should generate enough interest to make the industry take a long hard look at itself.
- Mastercard is to link executive bonuses to the company’s environmental, social and corporate governance goals.
- Monica Long, general manager of RippleX believes the fintech industry and crypto has a key role to play in making a carbon-neutral future for global finance a reality.
- A number of payments suppliers have started to re-evaluate the material that cards are made out of and have started rolling out cards which are sustainable and environmentally friendly.
The emerging payments industry is based on innovation and challenging the status quo. It’s clear that the industry as a whole is beginning to accept that sustainability and green finance must be at the forefront of the sector, and with global corporations such as Mastercard actively pursuing sustainability it’s likely that many others will follow. There is still however, a long way to go in green finance being adopted by the whole industry and with consumers also beginning to consider this issue more prominently in their decision-making, the green finance ‘boom’ is still to come.