The Green Fintech Report 2023

The Green Fintech Report 2023

October 26, 2023

The Green Fintech Report 2023 – titled “The Intersection of Green, Fin, and Tech: A Study across 5 APEC Economies” provides deeper insights into the developmental landscape of Green Fintech across Hong Kong, Indonesia, Thailand, South Korea, and Singapore.

Today, GoImpact, an ESG and Sustainability education and EdTech firm, once again partnered with The Chinese University of Hong Kong Business School (“CUHK Business School”) for their second collaboration to release the groundbreaking Green Fintech Report 2023 – titled “The Intersection of Green, Fin, and Tech: A Study across 5 APEC Economies”. This comprehensive study, supported by Ant Group, builds upon the success of last year’s report and provides deeper insights into the developmental landscape of Green Fintech across five APEC economies, Hong Kong, Indonesia, Thailand, The Republic of Korea (South Korea), and Singapore.

● Singapore – a regional hub for Green FinTech, boasts a thriving ecosystem with strong collaborations. However, concerns regarding data integrity and greenwashing remain, underscoring the importance of ongoing vigilance.

● Hong Kong – has demonstrated significant progress in terms of government policymaker support and collaboration with corporate sectors. However, Green FinTech startups and SMEs are looking forward to an improvement in funding access and structural support.

● South Korea – although the government is involved in developing the Green FinTech ecosystem, propelled by cross-border regulations, corporations are taking the lead in championing the green transition.

● Indonesia – with its fertile market, showcases the promise for exponential growth in Green FinTech. However, outreach and education programs are needed to facilitate widespread adoption.

● Thailand – while corporate engagement is currently driving the transition to renewable energy, for example, the AgroTech industry adapting to climate challenges, the government is projected to provide more requisite and systemic support.

The Need for Government Regulation in the Growth of Green FinTech

As sustainability takes center stage globally, governments in the 5 APEC economies are actively exploring innovative strategies such as carbon taxes and tax incentives for the GreenTech and Cleantech industries and Carbon Markets. However, the regulatory landscape in Asia faces challenges due to ambiguity, differing regulatory frameworks, and misaligned definitions and metrics.

Separately, SMEs face difficulties accessing and benefiting from green financing due to regulatory complexities and resource limitations, despite their potential for driving sustainable growth. Regulatory clarity is crucial for SMEs development, countering greenwashing, and increasing credibility and investor trust in sustainable finance. The lack of standardization in the complex Green FinTech landscape across these markets calls for regional collaboration for standardized best practices for alignment of ecosystems.

Both the Private and Public Sectors are Eyeing Green Technologies

Client demand for sustainability, performance, transparency, and accountability is fueling a transformative shift in investments. The private and public sectors are actively exploring sustainable and green technologies, such as carbon capture, usage and storage (CCUS) and ESG risk modelling.

Separately, AI and machine learning solutions are increasingly adopted by organizations, streamlining ESG compliance, carbon management, and risk assessment. For example, leading rating agencies like Sustainalytics and Moody’s incorporate AI and machine learning into their analytical frameworks, enabling faster and more accurate analysis of large volumes of data.

Challenges Faced by Green Fintech, Particularly the Critical Shortage of Talent

Apart from the necessity for green finance advancements, the heart of Green FinTech also confronts the challenge of finding talent that can bridge financial, technology, and sustainable knowledge. Corporations already grappling with complexities like Scope 3 emissions transparency and Net-Zero commitments recognize the strategic imperative of sustainability education and training.

In locations like Hong Kong, recruiting ESG experts proves challenging, underscoring the need for interdisciplinary talent development to drive sectoral progress. Currently, foreign talent is a temporary solution to bringing valuable experience and knowledge to governments and corporations. Their presence can play a guiding role in the establishment, development, and sustainability of Green FinTech ecosystems, effectively steering economies in the right direction.

To overcome these challenges and strengthen the Green FinTech ecosystem, companies should instill authentic ESG awareness beyond compliance; regulatory bodies must also collaboratively work towards establishing a regional taxonomy, standards, and policies. And finally, governments should encourage public-private partnerships and ensure the comprehensive development of sustainable talent.

Ms. Helene Li, CEO and Co-Founder of GoImpact, said, “It is very clear from the key findings in this second report that cross-sector collaboration and bridging the talent gap effectively will be crucial to advancing the Green Finance agenda. The frequency of extreme weather disasters are strong signals that we need to do more and do it faster, collectively.”

Prof. Kalok Chan, Wei Lun Professor of Finance at CUHK Business School, said, “It is our great pleasure to collaborate with GoImpact once again. This research paper continues the research from last year and focuses on how five APEC jurisdictions tackle the challenges in the green fintech ecosystem and develop decarbonisation pathways that are applicable in each of their socio-economic contexts. As one of the leading business schools in Asia, we will also continue cultivating talents with a socially responsible mindset and equipping them with the skills and knowledge to contribute for the betterment of the Green Fintech industry.”

Ms. Jennifer Tan, Executive Vice President, Strategy Development and Government Affairs, Greater Bay Area of Ant Group and Head of 10×1000 Tech for Inclusion, said, “As a company with a long-standing commitment to developing green fintech technologies, Ant Group is proud to support this research for the second consecutive year. The exploration of green fintech not only carries academic significance but also furnishes valuable insights into addressing the common global challenges we currently confront. We hope that this independent research can offer constructive insights that will catalyze the global growth of green fintech.”

Ed.  Data for the report  was gathered from approximately 120 public sources, websites, media coverage, and industry reports from March 2023 to July 2023. Article photo extracted from The Green Fintech Report 2023.


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