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Will fintechs lead the green revolution? 5 things we learned from our virtual panel

Fintechs are “in the fabric of society”, says ekko cofounder Oli Cook. So how can they push society to be more sustainable?

By Tom Ritchie

The green revolution is coming — but what role will fintechs play in it?

This was the central question of last week’s roundtable, “Can UK fintechs lead the green revolution?”, produced in partnership with Mastercard as part of its initiative to promote sustainability in financial services. 

Mastercard is one of the lead sponsors of the Round Britain Climate Challenge, which is currently taking place and sees the ‘Human Swan’ Sacha Dench try to complete the world’s longest flight in an electric paramotor. 

After losing her family home to Australian bushfires last year, Dench was inspired to circumnavigate mainland Britain to raise awareness of climate change and rally people to cut their carbon footprint. Dench introduced the roundtable, leading with a keynote on the UK’s leading role in sustainability. 

Joining us to discuss were fintech experts, including:

  • Scott Abrahams, SVP for business development and fintech at Mastercard
  • Tony Craddock, director general for the Emerging Payments Association (EPA)
  • Matthias Wikstron, chief executive of Doconomy, a Swedish loyalty programme based on brands disclosing their carbon footprint on products
  • Oli Cook, cofounder of ekko, a challenger fintech which creates positive action on climate change from consumer transactions
  • Evan Michaels CEO and cofounder of HELPFUL, the planet first card to help people live a sustainable life 

Here’s what we learned.

1. Fintechs are in a unique position to affect change

Our panellists all agreed fintechs are well positioned to drive sustainability across sectors. 

Cook described fintechs as “being in the fabric of society” — be it in small personal transactions at a coffee shop or in business-to-business payments, financial services underpin every aspect of the economy. 

By adopting more sustainable practices, fintechs can also influence the carbon impact of their clients. Banks, payments providers and benefits providers are an essential supplier for pretty much any business, giving fintechs a unique opportunity to breathe sustainability into the economy. 

“As a fintech you’re able to influence the sustainability of not only your own company, but also of your clients and their companies, too. Fintechs can act as catalysts for significant change.” — Tony Craddock, Emerging Payments Association

2. Payments could have the biggest sustainable impact

Abrahams points out this ability to affect change is most notable in payments. Payments act as commerce’s daily touchpoints with businesses and consumers, making businesses and fintechs in this space ideally placed to effect change. 

In 2020 Mastercard launched its Priceless Planet Coalition to work with businesses, financial institutions, consumers and other organisations to fight climate change and restore 100m trees by 2025.

As part of this Mastercard teamed up with Doconomy to provide a carbon footprint of every purchase made on one of their cards, and HELPFUL to reward people with cashback for sustainable living. It also supplies cards to forward-thinking sustainable fintechs such as ekko. 

“Payments has an unbelievable opportunity to be the consumer facing element of this change… Payments are your first introduction to financial services.” — Scott Abrahams, Mastercard 

3. Do your ‘reverse due diligence’ on investment

Thanks to an increase in VCs caring about ESG, fintechs seeking investment don’t have to sacrifice their sustainability goals.

The panel’s founders all agreed there’s plenty of ‘green investors’ looking to invest in sustainable fintech platforms — but were also wary about the origins of the money they took for their businesses. 

Cook believes there’s heightened consumer scrutiny on businesses with sustainability initiatives and goals, including who is investing into their business. In order to leave no stone unturned, Wikstrom says all entrepreneurs must do their ‘reverse due diligence’ to ensure they’re not receiving money from funds that also invest in fossil fuels or polluting products. ekko recently turned down investment from a fund they felt didn’t share their sustainable ideals. 

“The challenge we have when it comes to funding, is to find money that doesn’t come from dubious sources. There’s a lot of funds out there that invest in oil, or countries that don’t have the best human rights… We don’t want to have any money that has in some way contributed to something we don’t think is right.” — Evan Michaels, HELPFUL

4. Create effortless solutions to attract customers

Consumers want to be green, but often don’t know where to start, Cook says. He says the responsibility lies with fintech providers to educate consumers, while also providing solutions that are “effortless”. ekko does this by merging banking with loyalty style incentives, planting a tree for every 50 transactions by its customers. 

Michaels says consumers feel like they’re making a positive impact, without having to change their own behaviours, something which will then hopefully inspire greener actions in other parts of their lives. 

“What consumers want is for it to be effortless. I don’t think it’s realistic to expect consumers to read up on everything that they’re buying…. The more we spoke to consumers, the less it became about what they demand of financial services, and more just about a demand for doing good.” — Oli Cook, ekko

5. Better consumer behaviour lies in collaboration

Fintechs will always have some carbon impact. After all, banks or payment providers cannot control the spending of their customers for fear of losing them. Fintechs need to find ways of mitigating consumer behaviour, by educating customers as best they can. Wikstrom points out that this isn’t possible without some collaboration between service providers.  

One example is Mastercard’s Priceless Planet Coalition initiative which attempts to mitigate Mastercard’s clients’ environmental impact. The initiative’s goal is to influence partners to adopt more eco-friendly practices and undertake positive actions such as re-planting trees in the Amazon Rainforest. 

“We try to influence many markets around the world by finding fellow changemakers, collaborating with our guard down and saying this problem is far bigger than one we can solve on our own… Thinking we can solve this issue on our own is not only stupid, it’s naive.” — Mathias Wikstrom, Doconomy 

Want to watch the full event?  Learn more about how UK fintechs are leading the green revolution here:

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