Green Fintech

The Swiss Green Fintech Network was set up in November 2020 with the help of the State Secretariat for International Finance (SIF) and presented an action plan with 16 proposals on April 8, 2021. The action plan defines green fintechs as businesses that use digital technologies to solve environment-related problems in finance. They can be early-stage firms, scale-ups or established players, including units of incumbent financial institutions.

The proposals deal with the conditions such firms need: a platform for sustainability data, an annual innovation challenge for green fintech start-ups, open finance, a Swiss green fintech map and more funding options. Green fintech is therefore a technology category. ESG investing, which selects assets by sustainability criteria, is a different subject, covered on the ESG investing page.

Every card transaction carries a merchant category and an amount, and that is the raw material for carbon scoring. The Swedish company Doconomy built the Åland Index for the Bank of Åland. It assigns each transaction the carbon intensity of its spending category and shows the result in the banking app, next to the amount in euros, as Pictet describes. Pictet puts the reach of the technology at more than 80 banks and brands in 30 countries. The figures are estimates per category, not measurements of the individual purchase.

In Berlin, ecolytiq raised 13.5 million euros in 2022 with Visa among its investors, tech.eu reported. Its platform turned payment data into CO2 estimates for bank customers, and in 2021 it launched Visa Eco Benefits, a carbon footprint tracker that card issuers embed in their apps. Rabobank, Tatra Bank and Tomorrow Bank were among the early users.

Green fintech in payments starts from figures on the payments themselves. The ECB measured the environmental footprint of euro banknotes over their full life cycle. As Banka Slovenije summarizes the study, paying with banknotes caused 101 micropoints per euro area citizen in 2019, about the impact of driving a car eight kilometers, or 0.01 percent of a citizen's yearly consumption footprint. ATM energy use and cash transport contributed most.

The Riksbank's climate report compares methods in Sweden. Cash and cards have the highest climate impact per payment there, cards because of terminals and other equipment, while the Swish mobile payment system has less. All card and cash payments in Sweden together emit less than 2,000 Swedes do in a year. The card body is a separate question, covered on the sustainable credit cards page.

Finance Loop covers green fintech in two tracks: carbon data in banking apps and card programs in Payments & Digital Money, ESG reporting and ESG risk in Risk & Compliance. The ESG reporting page covers the CSRD side, and the green asset ratio page covers the disclosure figure of banks.

A company or unit that uses digital technology to solve environment-related problems in finance, in the definition of the Swiss Green Fintech Network. Examples in payments are carbon scores for card transactions and data platforms for sustainability reporting.

A Swiss network of start-ups and experts set up in November 2020 with the help of the State Secretariat for International Finance. Its action plan of April 8, 2021 contains 16 proposals, from a sustainability data platform to an innovation challenge for green fintechs.

They estimate it from the merchant category and the amount. Methods such as Doconomy's Åland Index assign each spending category a carbon intensity; the result is an estimate per category, not a measurement of the single purchase.

No. ESG investing selects assets by environmental, social and governance criteria. Green fintech is the technology that delivers environmental data or products in finance, in payments, lending or investing.