We gathered in Edinburgh to deliver the third event in our series dedicated to supporting the FinTech Scotland Research & Innovation Roadmap. Once again we hosted the event alongside lead sponsor Pinsent Masons at their wonderful office space in Edinburgh.
On the agenda this time out was climate finance as we considered “ESG: Investor expectations and the opportunities for FinTech to support ESG developments”
Finance, technology and data will play a fundamental role in addressing the climate change crisis and in powering a more sustainable future. The challenge ahead is huge and the financial services industry must make the right choices and focus research and innovation in key areas in order to deliver maximum impact across the climate transition.
To support investment choices and finance in the market, investors and consumers are looking for better information and credible data and have new expectations of the companies they invest in. Financial regulators are also aiming to influence positive climate outcomes and opportunities through a range of rules, expectations and guidelines.
At the same time equity and debt providers, themselves subject to increasing pressure to fold ESG factors into their investment / lending decisions, are increasingly looking to the ESG credentials of investee companies / borrowers. FinTech companies now need to be able to demonstrate their own ESG credentials in order to attract investment.We heard from a panel of industry leaders as they considered the opportunity to build collaborative climate action across financial services, FinTech and investment communities.
-ESG is important to fintechs for two reasons. One is that it is important to them as a business because it’s going to be important to their customers, and it’s going to be important to them in attracting investors. The second reason why it’s important is because it’s actually an opportunity for FinTechs. It’s a complex area. And there’s an opportunity for fintechs to offer solutions in the ESG space to help others to address the issues concerned.
-The key emerging ESG regulatory standards that fintechs need to be aware of are principally those that are affecting the financial services industry at large. The reason for that is that they are the customers for the FinTech industry, by and large, and so the pressures on those financial players from a regulatory perspective are going to trickle down to the FinTech industry as suppliers to the financial services industry.
-A FinTech business can best integrate sustainability into their organisation through people, policy, process and product. In terms of people engage internally and externally, by policy, having a robust science based policy with targets goals and objectives, with process have defined integrated activities throughout the organisation and products, use them to respond to challenges with new innovations
-One of the key ESG growth areas that fintechs can benefit from is within the data. Gathering data, both from a banking perspective, and better data around accessing finance for things such as housing transition, and also data around investments. Consumers and businesses have multiple touch points and data points when transacting with financial services, so there are lots of opportunities from gathering and utlising this data as well.
-Private equity houses often develop their own frameworks around ESG. Often of primary importance is the governance that a company has in place alongside their culture and the wider impact they are having on society. Environmental issues can often be less of an issue with software and technology companies, as their footprint or impact is usually less significant than other sectors such as manufacturing or energy. However it is still of importance and investors are focused on making conscious decisions about where they are putting their money, considering many factors beyond profit alone.
Yvonne DunnPartner, IT at Pinsent MasonsYvonne is a Partner who leads the Pinsent Masons financial services technology practice. She specialises in advising on outsourcing, systems development and integration and IT procurement. Yvonne also leads our FinTech practice and advises on complex projects which combine technology and the regulatory environment in which financial services clients operate. Yvonne leads several of our TMT and outsourcing relationships with major banking and insurance clients and regularly speaks and writes on TMT and outsourcing issues specific to the financial services sector. She is the firm’s board representative on Fintech Scotland.
Andrew DavidsonInvestment Director, Scottish Equity Partners
Euan McVicarSenior Climate Advisor
Julia SalmondFounder at CienDosJules is CEO and co-founder of CienDos – a climate-tech business, focussed on tracking, analysing and sharing corporate emissions data. Alongside the day-to-day management and strategic direction of the business, Jules has a core focus on shaping the go to market proposition and engaging with corporate consumers of the CienDos dataset to understand their environmental and wider sustainability data needs. Prior to founding CienDos in 2021, Jules co-founded Cerico, a world-leading SaaS Third-Party Risk Management (TPRM) business. Cerico was acquired by NewsCorp’s Dow Jones in 2018 where she led TPRM globally, overseeing 10x revenue growth and complex engagements with many of the world’s largest brands. She is a seasoned keynote speaker and published thought-leader on Climate-Tech & TPRM.
Hayden MorganPartner & Head of Sustainable Finance Consultancy
Ian Davey
