Sustainable Finance and FinTech: The new face of green investments

In the era of climate crisis and growing environmental awareness, sustainable finance has emerged as a key element in shaping the global economy. This approach is based on integrating Environmental, Social, and Governance (ESG) factors into financial decisions. By doing so, investors and financial institutions aim to mitigate negative impacts on the environment and society while generating returns. 

The role of FinTech in sustainable finance

Companies in the Financial Technology sector play a pivotal role in advancing sustainable finance by leveraging modern technologies to increase accessibility and efficiency in funding green projects. FinTechs provide individuals and institutions with better tools for making informed investments in eco-friendly projects. 

According to a report from Global Market Estimates, the global green FinTech market is expected to grow at an impressive rate of 22.4% annually through 2029. This dynamic growth reflects the financial sector’s commitment to environmental protection and the growing demand for green products and services.

Leading green FinTechs in Europe

Europe is home to numerous pioneering FinTechs that actively promote sustainable finance. Here are some of the companies that have gained recognition in the market due to their commitment to environmental protection and transparency.

• Downing is an investment management firm that aims to make sustainable investments more accessible to a broad range of investors. Its offerings include financial products related to renewable energy sources.
• ekko is a FinTech focused on promoting sustainable banking. It offers a digital banking solution centered around eco-friendly practices, including tracking users’ carbon footprints. ekko enables clients to monitor the environmental impact of their spending while reinvesting a portion of its profits into sustainability projects.
• Sugi is a FinTech that helps users make informed investment decisions by providing data on the carbon footprint of various financial instruments. The platform analyzes the environmental impact of about 95% of the world’s equity markets and many investment funds. Sugi partners with Ecosphere+ to offer verified carbon credits sourced from forest conservation projects.
• Tomorrow is a German startup offering mobile banking services focused on sustainable development and transparency. Through its Tomorrow Zero subscription, clients can fund projects that help mitigate climate change, such as building biogas plants in Vietnam, improving access to clean water in Uganda, or supporting small-scale farmers in Peru. Tomorrow also collaborates with institutions supporting the UN Sustainable Development Goals, including through the issuance of green bonds.
• TreeCard is a payment solution aimed at combating deforestation. The company’s business model allocates 80% of profits from transaction fees towards tree-planting initiatives. By using TreeCard, users can easily support environmental projects worldwide.

Examples of companies like Downing, ekko, Sugi, Tomorrow, and TreeCard illustrate how FinTech can support and develop green finance initiatives. Through innovative and tech-driven approaches, FinTechs are making sustainable finance more accessible and transparent. Their products and services enable better risk management and improve capital efficiency, which benefits investors as well as environmental protection.

The growth of the green FinTech sector is not just a trend but a critical element of the global economy’s future. Leveraging financial technologies to promote ESG principles creates new opportunities while addressing the increasing need for environmental protection. Sustainable finance is no longer just a passing trend; it has become an integral part of today’s financial market.

Do you want to make your investments not only profitable, but also ESG-compliant? Our lawyers will be happy to advise you on how to develop the best solutions for your company. Feel free to contact us!