Sustainable Development – hardly any 21st century discussion can go without involving an element of that. It spans everything from climate crisis to human rights, and yet so often is used just to “fill in the check-boxes”. But how does it relate to finance?
Whenever you make a purchase and pay for it, you are essentially consuming a product or service that has an impact on the environment. Each of these activities, whether it’s food, clothing, transportation, housing, or travel, emits greenhouse gases. As a result, every action you take, except for walking outside, contributes to emissions.
Naturally, as consumers become more aware of the costs of their financial decisions, so does the demand for transparency and information from financial institutions. In modern terms, we define this as a result of the growing importance of ESG – a set of criteria used by socially responsible investors to evaluate performance in the areas of Environmental, Social, and Governance.
For a long time, the question of whether ESG will transform financial systems has been off the table. Consumers are demanding greater transparency, and investors are becoming far more astute in assessing long-term social costs and risks. Perhaps the rising public demand has even enabled us to close the loop in which ESG empowers finance and financial technologies boost ESG. Here are a couple of examples:
- Companies that have better ESG performance are more likely to receive investment funds. Many investors are now incorporating ESG factors into their investment decisions. As a result, companies are now paying more attention to their ESG performance, which can lead to better environmental and social outcomes. Also, the word has been spread that impact investing, where investors seek to generate positive social and environmental impact alongside financial returns, is a new trend.
- Transparency to make more ethical and informed investment decisions. ESG reporting is becoming more standardized, which is improving transparency and making it easier for investors to compare companies based on their ESG performance. This is also making it easier for investors to identify companies that are not disclosing their ESG risks or impacts.
ESG investing is becoming more popular, and the fintech industry is leading the way in incorporating these considerations into their operations. Fintech firms are empowering investors to make more informed and ethical investment decisions while also promoting sustainable and socially responsible practices by leveraging technology. The time has come to embrace the power of ESG investing in fintech. Join Amsterdam Fintech Week 2023 to learn more!
Don’t miss out on the opportunity to learn more about the Dutch fintech ecosystem by attending Amsterdam Fintech Week 2023!
Amsterdam FinTech Week (XFW) is a week-long event held in Amsterdam, the Dutch capital. We bring together all relevant players, stakeholders, and companies active in the FinTech scene through a variety of events and opportunities to bring you the most recent knowledge, developments, and insights. A two-day Summit, an expo, community activities, several highly anticipated keynotes, expert panels, workshops, and startup pitches are all planned for the week. It’s also an excellent opportunity to network with key industry players, learn from one another, and do business.
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