Issue #385 - Sustainable Finance: The Fuel For Growth October 13th, 2022

Many US states are against the green policies of BlackRock: the multi-national investment company lost over $1 billion for institutional investors’ withdrawals.

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The Sibos conference aims at being the most sustainable event in the world: Melissa Sternberg, Global Head of ESG at Swift, joins the show to talk about how sustainability goals can be reached.

Despite ESG – environmental, social and governance – being a new trend in investments, not everyone agrees. Many concerns are not related to ESG itself, but to the fact that companies may use it as a gimmick.

Cardano is among the most sustainable crypto projects in the digital economy, and its innovative solutions may further increase the value of its crypto: the team behind Cardano and its founder, Charles Hoskinson, have been working on a new consensus mechanism – proof of useful work – which can make blockchain more sustainable.

According to Bloomberg, sustainable debt instruments reached over $1.6 trillion in 2021. Moreover, GTB – global transaction banking – has a large room for growth. One more point to take into account is that the demand for sustainable banking products exceeds supply – according to BCR Publishing. From this data, it is clear that sustainable GTB is not only a great opportunity for the banking sector but might also become imperative to meet consumers’ and investors' needs.

The top bank HSBC has launched a new platform for the UK and Hong Kong markets: the HSBC Trade Solutions – HTS – allows clients to manage their trade finance products thanks to one online platform. Thanks to the leverage of API technology, this solution will help HSBC to further improve its future services also under an ESG perspective.

As mentioned, not only consumers but also investors care about ESG and want the businesses and institutions they cooperate with to follow ESG best practices. Moreover, ESG might not be a choice in the near future: the International Sustainability Standards Board and European Commission are setting new standards that can become the basis for a widely adopted regulatory framework.

Fintech plays a major role in the achievement of ESG-related goals. Singapore keeps this in mind, and one of the most significant speeches delivered at Sibos is the one of Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS). Mr Ravi said that fintech has to solve two problems – cross-border payments and ESG data – and that it’s not only a task for institutions, but also for all fintech players – from startups to top companies.

In fact, the MAS has developed an ESG Impact Hub, where ESG fintech startups can meet investors and financial institutions, to create an ESG-friendly environment.

India is another country where ESG and sustainable finance are taken into high consideration: a panel of the IFSCA – International Financial Services Centres Authority – is developing a new framework for green fintech and a global climate alliance.