# Why sustainability presents one of the greatest opportunities for the Financial Services industry Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-04-29 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: The Climate Crisis & the Role of Finance in the UK Meta Description: Discover how UK financial institutions are contributing to emissions and how Fintech can lead the way in tackling the climate crisis with innovative solutions. URL: https://financedigest.com/why-sustainability-presents-one-of-the-greatest-opportunities-for-the-financial-services-industryhtml ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/david-lais-450x615-1736815792847-compressed.jpg) _By_ **_David Lais,_** _co-founder and CPO at ecolytiq_ _“Finance is the UK’s dirty little secret”_ This quote came from John Sauven, UK Executive Director of Greenpeace who went on to explain how “banks and investors are responsible for more emissions than most nations” and berated claims that the UK is [leading](https://www.financedigest.com/2022-the-year-that-facial-recognition-will-lead-the-fintech-industry.html "2022 – The year that facial recognition will lead the fintech industry") the world on climate action while “allowing financial institutions to plough billions into fossil fuel production every year”. This was taken from a 2021 [report](https://www.greenpeace.org.uk/news/uk-banks-and-investors-responsible-for-nearly-double-the-uks-annual-carbon-emissions-report-finds/#:~:text=A%20new%20report%20%5B1%5D%2C,higher%20than%20Germany%20%5B2%5D) which also found that UK financial institutions are responsible for 1.8x the UK’s annual net emissions of CO2. For the Fintech industry, these findings present a massive [opportunity to contribute to a new banking and finance](https://www.financedigest.com/how-finance-leaders-can-turn-the-inflation-challenge-into-opportunity.html "How finance leaders can turn the inflation challenge into opportunity") ecosystem that is actively tackling the climate crisis instead of accelerating it. Climate-focused Fintechs have what is necessary to innovate and help [banks to build services](https://www.financedigest.com/30-per-cent-of-uk-consumers-would-use-amazon-google-facebook-or-apple-for-banking-services.html "30 Per Cent of UK Consumers Would Use Amazon, Google, Facebook or Apple for Banking Services") and solutions for climate action that they themselves cannot yet provide. **The growing demand for sustainable options** Sustainability isn’t a trend – it’s here to stay. As such, it [needs to be addressed](https://www.financedigest.com/if-the-nation-backs-fintech-we-need-to-address-a-few-things.html "If the nation backs FinTech, we need to address a few things") – or better yet embraced – across all sectors. Conscious consumerism is on the rise and a recent study\* highlighted that more than 60% of us are looking for more sustainable [financial services](https://www.financedigest.com/trends-in-the-financial-service-landscape-and-the-impact-on-fraud.html "Trends in the financial service landscape and the impact on fraud") and products, while over half also believe that there are not enough sustainable choices on the market at present. Consumers value sustainability and one of the biggest impacts they can have on sustainability is through their finances. But why is the link between finance and the climate crisis so important? The world, as we know it today, was built on [fossil fuels](https://www.financedigest.com/bank-finance-for-cleaner-energy-grows-but-still-lags-fossil-fuels-report.html "Bank finance for cleaner energy grows, but still lags fossil fuels – report"). Therefore, to change that system we need to rethink, future-proof, and transform our infrastructure – quickly. The business-as-usual approach will lead to ruin and shouldn’t be understated. To quote UN Secretary-General António Guterres on the recent IPCC report: “Delay means death”. To realise the fundamental changes that we need, like ‘greening’ how we drive to work or heat our homes, we [need to fund the sustainable](https://www.financedigest.com/why-coding-needs-to-be-re-evaluated-for-sustainability-objectives.html "Why coding needs to be re-evaluated for sustainability objectives") infrastructure for the future. Finance can then play the [role of enabler and a tool to actively tackle the climate](https://www.financedigest.com/inflation-fighting-central-bankers-air-climate-role-doubts.html "Inflation fighting central bankers air climate role doubts") crisis, not only for new industries aimed at combatting and adapting to climate change, but also through empowering customers with more transparency around their money. Consumers, whether knowingly or not, are shaping the [future of our planet with every swipe of their payment](https://www.financedigest.com/the-future-of-biometrics-in-payments.html "The Future of Biometrics in Payments") card. Every purchase we make is attached to an environmental currency. The [things we buy](https://www.financedigest.com/4-things-to-consider-before-buying-your-dream-car.html "4 Things To Consider Before Buying Your Dream Car") and consume have an impact on our environment: they emit carbon, they use up water and they impact biodiversity. Not every purchase, however, is the same. Despite the plethora of payment [data financial](https://www.financedigest.com/how-big-data-is-sending-shockwaves-through-the-financial-services-sector.html "How big data is sending shockwaves through the financial services sector") institutions possess, consumers aren’t receiving that kind of transparency or empowerment from their banks, and that makes taking climate action much harder. **The relationship between** [banks & Fintechs](https://www.financedigest.com/britain-seeks-to-boost-banking-services-from-fintechs.html "Britain seeks to boost banking services from fintechs") At the start of the [Fintech revolution there were fears that Fintech disruptors would challenge the longevity of traditional banks](https://www.financedigest.com/why-banks-could-stand-to-learn-a-thing-or-two-about-financial-inclusion-from-fintechs.html "Why banks could stand to learn a thing or two about financial inclusion from fintechs"), however, the reality was, for the most part, very different. In fact, mutually beneficial relationships developed as new Fintechs carved out niches to help fix some of banking and [finance’s biggest challenges](https://www.financedigest.com/from-fragmented-systems-to-unified-cpm-unicredit-prepares-for-todays-finance-challenges.html "FROM FRAGMENTED SYSTEMS TO UNIFIED CPM – UNICREDIT PREPARES FOR TODAY’S FINANCE CHALLENGES"). This new generation of specialised Fintechs has proven to be a worthy partner, working with the [banking industry](https://www.financedigest.com/the-survival-of-the-banking-industry.html "THE SURVIVAL OF THE BANKING INDUSTRY") to innovate their way out of problems caused by outdated systems, processes and, frankly, old-fashioned infrastructure. To this end, these Fintechs could enable [financial service providers to drive](https://www.financedigest.com/how-crowdsourcing-can-help-drive-the-benefits-of-advanced-analytics-in-financial-services.html "HOW CROWDSOURCING CAN HELP DRIVE THE BENEFITS OF ADVANCED ANALYTICS IN FINANCIAL SERVICES") a far more effective and attractive customer engagement experience. Technology and climate change move fast. Traditional [banking systems are often not agile enough to stay abreast of changes or even demonstrate effective](https://www.financedigest.com/banking-turmoil-will-not-have-knock-on-effect-on-commodities-trafigura-cfo.html "Banking turmoil will not have knock-on effect on commodities -Trafigura CFO") leadership in this regard, leaving an ever-widening gap between customer expectation and bank offering. **The big opportunity for the** [financial industry](https://www.financedigest.com/73-of-employees-in-the-banking-and-financial-services-industries-are-looking-for-better-physical-and-mental-wellbeing-support-in-the-workplace.html "73% of employees in the banking and financial services industries are looking for better physical and mental wellbeing support in the workplace") Enough of minding the gap, now is the time to bridge it. Consumers are actively looking for climate-friendly solutions; they’re not only willing to change their behaviour, but they are also willing to [spend their money](https://www.financedigest.com/student-finances-exposed-how-do-they-really-spend-their-money.html "Student finances exposed: How do they really spend their money?") in line with their values and beliefs. What’s still [missing is easy and effective green banking](https://www.financedigest.com/challenger-banks-missing-golden-opportunity-to-steal-business-from-competitors-by-repeating-same-old-mistakes.html "Challenger Banks Missing Golden Opportunity To Steal Business From Competitors By Repeating Same Old Mistakes") services. The good news is that the payment data for sustainable banking exists. The companies, technologies and methodologies to transform that data into a force for climate good also exist. Therein lies the biggest opportunity for [financial institutions](https://www.financedigest.com/3-ways-financial-institutionscan-leverage-live-engagement-on-social-media.html "3 ways financial institutions can leverage Live Engagement on social media"). Change starts with education. By providing transparency on environmental impact based on personal [finance data](https://www.financedigest.com/navigating-consumer-data-in-the-finance-industry.html "NAVIGATING CONSUMER DATA IN THE FINANCE INDUSTRY"), financial service providers can become sustainability hubs, thereby generating scalable impact and making climate action accessible. Empowered customers then [drive new demand for green](https://www.financedigest.com/green-bonds-are-set-to-drive-corporate-esg-debt-out-of-slump-in-2023-barclays.html "Green bonds are set to drive corporate ESG debt out of slump in 2023 -Barclays") products – and banks can innovate as enablers. The future is green. Why not let customers take part in that future? Through ESG investments into the climate positive sectors and technologies, [banks can open](https://www.financedigest.com/barclays-private-bank-opens-new-office-in-verbier-switzerland-for-2022-23-ski-season.html "Barclays Private Bank opens new office in Verbier, Switzerland for 2022/23 Ski Season") new, durable revenue streams while increasing customer centricity, turning the customer’s banking experience into a force for good. When was the last time you left your [banking app and felt better about the world](https://www.financedigest.com/post-crash-banking-regulation-is-transforming-the-world-of-corporate-lending-for-the-better.html "Post-crash banking regulation is transforming the world of corporate lending – for the better") than before? Green [banking changes](https://www.financedigest.com/how-open-banking-will-change-the-banking-industry-in-the-next-10-years.html "How Open Banking will change the banking industry in the next 10 years") that. The beauty of all this? [Banks don’t need to change their core business; they just need to embrace sustainability and make it priority number one](https://www.financedigest.com/how-banks-will-evolve-to-support-small-business-owners.html "How banks will evolve to support small business owners"). It’s never been easier to disrupt the market by changing so little to generate so much impact on balance sheets and for our planet. In the end, it’s a win for everyone: investors, customers, banks, future generations, and the planet. **Ends** _David Lais is co-founder and CPO at ecolytiq – a climate [engagement provider enabling banks](https://www.financedigest.com/how-conversational-commerce-can-help-banks-engage-with-millennials.html "How conversational commerce can help banks engage with Millennials") and other financial institutions to give their customers transparency on how their spending behaviour affects the climate. The ecolytiq software encourages consumers’ behavioural change, offers [impact offsetting and sustainable investing as tools for climate](https://www.financedigest.com/climate-impacts-heading-to-uncharted-territories-of-destruction-un-chief.html "Climate impacts heading to ‘uncharted territories of destruction’ -UN chief") action._ --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---