A report, jointly produced by McKinsey & Company, Elevandi and the Monetary Authority of Singapore draws on insights shared at the ESG track of the recent Singapore Fintech Festival.

One of the most pressing issues highlighted during the Singapore Fintech Festival 2022 (SFF 2022) was sustainability, particularly the critical need to prioritize efforts in this area, both by the fintech sector and the rest of the world. The new study showcases how fintechs can contribute towards a greener future.

«Net zero is a massive mountain to climb, and reaching the critical sustainability goal will test society’s capability and commitment. The McKinsey Global Institute has provided a steep estimate – that $275 trillion in capital spending between 2026 and 2050 would be needed», Pat Patel, Executive Director of Elevandi, said, commenting on the launch of the report.

Key insights from the report include:

  • The move to a net zero global economy by 2050 will require the greatest reallocation of capital since World War II, coupled with a massive influx of financial innovation.
  • Data remains crucial in supporting the innovation of fintech: Data collection and analysis are crucial factors in whether fintech innovation can successfully support sustainability goals. Data is necessary to make informed decisions, evaluate market participants, and assess initiatives' success – or failures –. Yet good data remains a scarce commodity.
  • Fintechs are already playing a role in driving the sustainability agenda. «Fintechs for Good», i.e. Fintechs that embed an ESG agenda into their core product portfolio, operations and mission, attracted $2.1bn in funding in 2021, and this trend is expected to continue. As sustainability efforts proliferate, a key challenge for all companies would be to demonstrate real impact and self-protect against greenwashing.
  • Encouraged at least in part by increased concern for climate change, regulators worldwide are taking a keen interest in sustainability claims by corporations, particularly their reporting activities.

«Drawing on research done by McKinsey and the proceedings of the ESG track of SFF 2022, this report provides insights into how fintech has the potential to help us reach a sustainable future,» Joydeep Sengupta, Senior Partner, McKinsey & Company, said.

Moving the Sustainability Agenda Forward

«In the first half of 2023, we will continue to bring policymakers, and regulators together with corporates, startups and investors to progress frameworks and concrete initiatives. We'll be convening key global leaders in Rwanda to focus on inclusive and sustainable fintech projects and Switzerland to focus on technology and data frameworks required to move the sustainability agenda forward,» Patel added.

The «SFF 2022 Insights: Enlisting FinTech To Help Create a Sustainable Future» report is one of the seven reports Elevandi will be releasing with consultant partners, which include topics such as Web3 and digital assets, banking for business, balancing innovation and regulation, the future of fintech in growth markets, and how fintech can become more resilient to volatile market conditions.