BOSTON–“Green banking” and related initiatives at financial institutions has the capability to become a “game changer,” according to a new analysis released by the analytics firm GlobalData.
“With the global transition towards the creation of a low-carbon, climate-resilient, and circular economy, banks are reeling under pressure surrounded by customers demanding transparency and accountability as well as investors equating financial risks with sustainability,” said Kiran Raj, practice head of Disruptive Tech at GlobalData. “They are increasingly exploring value propositions that not only empower them to meet global goals but also propel revenue growth and offer a competitive advantage.”
Added Shagun Sachdeva, project manager of Disruptive Tech at GlobalData,: “As green banking is a key enabler of the planet-saving decarbonization journey, financial institutions are betting big to support an entire gamut of priorities right from the development and adoption of climate-friendly banking practices, focus on green and social bonds, greater investments in green projects to transition from traditional energy sources towards renewable energy.
Demand Exceeds Supply
“Albeit the demand for green banking products far exceeds supply, the key for the financial institutions will be to remain consistent in building a solid sustainable banking value proposition that enables them to defend existing relationships, expand their market share, and create differentiation in the offerings.”
According to GlobalData, its Innovation Explorer database that is part of the Disruptor Intelligence Center highlights some of the key startups driving innovation in the green banking space.
The Start-Ups
Among those start-ups:
- ecolytiq, a Germany-based green finance startup, which as developed an all-in-one sustainability-as-a-service (SaaS) solution to enable financial institutions to offer environmental footprinting, personalized impact offsetting, and environmental, social, and governance (ESG) investments to its customers. The startup works in partnership with financial institutions such as Visa, Rabobank, and Tink.
- Doconomy, a Sweden-based fintech startup, has created a credit card DO Black that tracks CO2 emissions from bank transactions and limits the impact of customers' spending on the environment. The startup has collaborated with banks such as Standard Chartered, Bank of the West, and Commercial Bank of Ceylon.
- Yayzy, a UK-based startup, which has created a fintech platform to assist banks and fintech companies to incorporate sustainability data into their customer transaction data. It offers users recommendations on how to easily decrease and offset banks’ carbon footprint using a mobile app. Yayzy boasts to support big banks such as Santander, BBVA, and Deutsche Bank.
- CO2 Connect (CO2X), a Singapore-based startup, which has developed a solution that offers regional small and medium-sized businesses (SMEs) access to green finance services by automating carbon emission estimates and reporting. It works with banks such as OCBC and United Overseas.
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