The Monetary Authority of Singapore (MAS) has launched the ESG Impact Hub to spur collaboration between ESG fintechs and solution providers
The Hub will also anchor industry-driven sustainability initiatives such the Point Carbon Zero Programme and KPMG’s ESG Business Foundr. The establishment of the Hub seeks to capitalise on the industry interest in Project Greenprint and expedite the growth of Singapore’s ESG ecosystem on three fronts:
Growing ESG fintechs: the Hub will facilitate the discovery, scaling, and deployment of technology solutions to address ESG needs of corporates and financial institutions, notably in terms of accurate measurement, reporting, and verification of climate and sustainability data.
Anchoring ESG enablers: MAS will engage knowledge partners, financial institutions, and investors to organise key ESG initiatives out of the Hub, such as ESG fintech accelerator programmes, training, capacity-building workshops, and thought leadership events.
Supporting ESG stakeholders: MAS will engage the Hub community to deploy its programmes and solutions to drive material, quantifiable impacts that support sectoral transition efforts, with particular emphasis on the eight focus sectors identified by the Green Finance Industry Taskforce (GFIT).
Who is in the Hub?
At the time of launch, 15 ESG fintechs and organisations are already set up at the Hub. MAS will continue to engage key stakeholders in building the Hub’s onsite community and fostering partnerships to help financial sector’s access to climate and sustainability data, to support more efficient deployment of capital towards green and sustainable projects.
As stated by the officials, Singapore is well-placed to be an ESG and carbon services hub for Asia and support the region’s climate ambitions, but it must continue to mobilise key private and public sector stakeholders to effectively scale.
Having established a carbon neutral cloud platform that green fintechs are now using to build their solutions, the next phase of the Point Carbon Zero Program will involve mobilising the wider industry ecosystem to advance the adoption of these solutions. In collaboration with MAS, KPMG, and financial institutions, Google will be launching the inaugural Climate Finance Accelerator, which aims to channel capital toward green fintech companies and create opportunities for them to work closely with the rest of the industry to address challenges in areas like sustainability reporting, green credit scoring systems, and supply chain traceability.
The importance of ESG for fintechs
Fintechs are faced with shifting customer expectations, and in addition to personalisation and other innovations, customers are increasingly demanding financial products that incorporate personal values on social and environmental issues. According to the 2022 Edelman Trust Barometer, 58% of stakeholders will buy or advocate for brands based on values and beliefs. Edelman also found that stakeholders want businesses to do more to address societal issues.
As ESG trends, customers are starting to pay closer attention to the link between how they access financial products and global challenges. The rise in climate strikes, geopolitical crises, and awareness of inequality in what has been termed the ‘information age’ will mean that fintechs will need to use their capabilities to be responsive to the resultant shift in expectations.
Fintechs must brace themselves for ESG being a topic of interest for stakeholders and should use their technology skillset and innovative product development experience to meet these rising needs. This, whilst taking care to avoid greenwashing and social washing.