Copenhagen Fintech Magazine 2020 — How fintechs are driving change in the sustainability space
“We are flying less and eating less meat in order to lower CO2 emissions. To protect the oceans from micro-plastic pollution, plastic straws, and bags have been almost completely abolished. And thankfully, the subject of equality is no longer confined to the feminists writing in the newspaper’s debate section”. Such is written in the Copenhagen Fintech Magazine 2020. Seeing more and more people becoming increasingly eco-conscious and actively engage in incorporating such changes into their everyday life is truly exciting. However, seeing the effects of efforts undertaken in the fintech sector can be less straight-forward. Thus, the focal theme of Copenhagen Fintech Magazine 2020 is portraying those who have made furthering sustainability and equality their mission. In short, we are focusing on the question of how fintechs are contributing to make the world a greener, more just place.
Numerous Danish fintechs promise to deliver more than an increase in convenience for their customers. They want to create real change and deliver on the UN Sustainable Development Goals to impact society beyond Danish borders. Considering the rapid growth of the fintech sector; those promises seem to be materializing. Last year, the fintech scene again defied industry trends and has now created more than 3000 jobs while the company count rose to more than 250 fintechs.
As the sector is ever-expanding, some fintechs are growing up. Reaching adulthood means they are now facing new challenges such as obtaining banking licenses, increased regulation and compliance requirements. Navigating this changing operating environment without slowing down on innovation and remaining the agile ‘new kid on the block’ is a juggling act. While they need to institutionalize organizational structures and establish their own ‘corporate’ culture, they need to build up new competencies and keep the essence of what made them initially successful — being a rebel.
Encouragingly, out of the 250 Danish fintechs, one in five fintechs is already actively working towards expediting impact and sustainability. However, to eventually make the ambitions of the UN’s Sustainable Development Goals reality, we would need to mobilize trillions of dollars every year. Yet, despite capital being available in the financial markets, it is not channelled towards sustainable outcomes at the extent and rate required. In our cover story, we portray two ambitious fintechs who leverage technology to accelerate sustainable investments. The team of early-stage fintech DoLand has been working relentlessly to prepare the upcoming launch of their robo-advisor. Their robo-advisor is intended to make such investments accessible for all — following their conviction that “sustainable investing should be a part of a modern lifestyle”. Likewise, the slightly more mature startup Matter is working on bringing radical transparency into the sustainability performance of investment portfolios to both institutional and retail investors. Matter’s assessment of sustainability reaches far beyond increasingly outdated and subjective ESG ratings. Their reports powered by AI and machine-learning tools enable insights if the portfolio is free of weapons, fossil fuels, etc.
How fintechs can help and have a significant impact on society could also be observed when the global pandemic threw the world into turmoil earlier this year. With the crisis still ongoing and infection numbers rising again in most European countries, uncertainty in the market is prevailing and businesses, as well as individuals, are enduring the consequences. Fintechs were crucial in implementing many different relief packages and still play a leading role in doing so. Furthermore, Nordic fintechs with their strong focus on sustainability should play a crucial role in driving a value-based recovery. Building on the strong roots of our Nordic human-centred design thinking approach and stakeholder capitalism, it is undeniable that now is the time to think beyond maximizing shareholder value. We need to ask ourselves “How can we lead the future in the most sustainable way?”
If you want to read all the articles about how fintech is moving towards real action in the world of sustainability, check it out here https://www.businessinsights.dk/copenhagen-fintech/