How FinTech is Going Green

Everyone loves touting their green credentials these days. Even oil companies make commercials detailing how clean their products are. But there’s still a gap between talking green and going green. The plastics industry lied about recycling, while even venerable organizations like the Sierra Club have advocated for policies that increase people’s carbon footprints and pollution.

As a result, building a green investment portfolio is a fraught affair, requiring a great deal of knowledge, research abilities and ultimately, judgement calls. But financial technology can make it easier, for both individual and business investors, by using the abilities of computers to process and visualize large amounts of data. 

For instance, a company may say that they’re buying a certain amount of carbon offsets to reduce their carbon footprint, but a green fintech would be able to estimate it and compare it to the offsets. Similarly, a fintech could easily analyze the offerings of firms like Vanguard or Franklin Templeton for sustainability or carbon emissions. 

Several companies provide tools that help consumers know the carbon footprints of their purchases in order to help them reduce them. Other fintech firms are planting trees when consumers use them to make purchases, investing in green energy products and using merchant fees to buy offsets.

Financial technology is branching out into cryptocurrency. SolarCoin supports solar energy projects, BitGreen rewards carpooling and other environmentally-friendly actions. Others use technology to reduce the environmental impact of cryptocurrency — BitCoin mining uses a lot of energy and produces a lot of e-waste. The cryptocurrencies fall into familiar groups — either decentralized or run by a non-profit. Some are sponsored by existing companies. 

The future of green financial technology will likely be more mainstream as both sustainability and fintech become more important in the overall economy. Already many conventional financial service companies are rushing to bring out products and services to compete with younger fintech firms. Governments trying to incentivize eco-friendly behavior could also get in on the action. For example, bottle deposits could be replaced with a cryptocurrency. Blockchain-based applications may also finally allow for paperless record keeping without the security hassles protecting people’s data normally causes. Paying taxes, filing forms and the rest could be done securely through the internet. 

FinTech is truly a diverse field for the many different types of transactions, now with environmental sustainability thrown into the mix.