Climate FinTech’s Rise to Power
Combining two powerful industries could create power products, and perhaps that is exactly what Climate FinTech companies aim to achieve. Climate Tech’s role in the technology industry is impactful, with its advanced solutions to reduce carbon emissions, adapt to new climates, and more. One essential part of Climate Tech is fintech software, and their use of it has been rising since the start of 2022.
It is no secret that climate change has taken over the world recently; activists like Greta Thunberg and Dominique Palmer have become the face of enacting policies that can slow down the harm that threatens Earth’s residents over the next 30 years. With a plethora of new voices beginning to gather and riot in the name of climate change, companies have been focusing their efforts on becoming more eco-friendly. However, Climate tech companies have taken a bigger step forward by tackling carbon emissions through technologies like carbon capture and storage. The Climate Tech industry has just begun the start of what will be a booming industry in the years to come.
While effective products have yet to come through, these companies have definitely attracted a lot of attention, and that comes with a lot of investors. Even moreso, the rise of Climate Tech companies has increased more since late 2021 when a new player was introduced to the game: FinTech. It may seem unclear as to how exactly Climate Tech could work with FinTech successfully, but bunches of new companies and businesses have opened up with innovative ideas that are sure to attract audiences.
Stripe, an Irish-American financial services company, recently announced a new product named Stripe Climate; the climate removal tool allows online businesses to redirect select profit towards technologies that are aiming to reduce carbon footprints. Stripe Climate went global, and more than 100 European companies have signed up for it.
Climate’s newfound popularity has also allowed it to become a more popular investing norm. A Finnish fintech company called Cooler Future coded a retail stock investing application that’s focused on carbon emission impact. Trine allows users to invest in renewable sources of energy, famously focusing on solar energy, by connecting them to emerging markets on the rise. Another company called Carbon Collective, builds robo advisors that can help construct portfolios without causing a huge climate impact.
This merging of Climate Tech and FinTech goes as far as to expand into neobanks - which, given the FinTech trends, would be expected. Aspiration’s tiny contribution goes a long way; their platform allows users to round their purchase up to the nearest dollar, and the rounded money goes towards planting trees. Atmos Financial uses renewable energy investments made through deposits to offer bank savings accounts that are engineered specifically for reversing the climate change situation. Even Carbon Zero donates some of its credit/debit card interchange profits towards the cause of carbon removal and allows users to track its carbon footprint.
In an attempt to join in on this latest trend, banks and other financial services are doing their best to contribute to the cause. Goldman Sachs joined open source initiatives for climate change while the American Bankers Association argues for a low carbon footprint economy.
What Does This Mean for the Future:
Silicon Valley has been fled from CleanTech before, so while Climate FinTech may not necessarily prove to be as stable in its venture, it’s definitely a power that will soon strike the stock market through basic moral principles and ethics.