Climate Finance and ESG: The Future of P2P Investing
Recently, the Monetary Authority of Singapore (MAS) and Google Cloud jointly launched the “Point Carbon Zero Program”. The program is aimed at boosting climate Fintech solutions that can lead to better deployment of capital in green and sustainable projects.
To support the program, Google will launch the world’s first open-source cloud platform for climate finance. This platform will help fintech companies to integrate climate finance solutions leading to a higher adoption by the financial sector. Financial institutions in Asia will be asked to submit a total of 1000 applications, from which 100 will be further considered for development. Fintechs participating in the programme will enjoy various benefits such as mentorship, funding, access to data and managing their own carbon footprint that will be supported by Google Cloud. The main objective of the program is to empower 10,000 companies to reduce carbon emissions and achieve their sustainability targets.
Role of Fintech Companies in Climate Finance
2021 was one of the best years for Fintech Companies involved in Climate Finance, with over 600 deals closed and $40 billion deployed by investors. This is more than twice the capital deployed in comparison to 2020. According to the Climate Tech VC report, mobility and energy firms are of the most interest, with food and water solutions in near third place. People are investing heavily in companies such as Rivian, Northvolt, Helion and Commonwealth that are highly focused on reducing carbon emissions.
ESG and P2P Investing
ESG Investing is a form of sustainable investing that involves analyzing the impact of environmental, social and governance factors in financial decision making. According to a survey conducted by Robo.cash, more than 50% investors are familiar with ESG Investing and 24% are actively looking to implement these factors in their financial decisions. The main motive of investors behind ESG Investing is to put their investment in areas that are in line with their personal values and to make the world a better place. Efficient utilization of resources and climate change are the top areas considered by investors for ESG investments.
ESG Development will be a key factor for the P2P Industry as more and more investors are getting concerned about the world around them. As per the data, 42% of investors take ESG criteria into account when choosing their ideal P2P investment platform. Additionally, 18% of respondents shared that they would invest more if the P2P Platform met their ESG initiatives, with 36% of respondents answering a “rather yes”.
Climate Finance and ESG Investing is slowly gaining popularity as governments, investors and individuals around the world are becoming increasingly concerned about the world around them. The way P2P companies integrate ESG factors will be one of the important criteria for investors when deciding between various P2P platforms.
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