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Fintech tools for sustainable business

Alfred Lee
Alfred Lee
Managing Director, Data & Analytics, Asia Pacific, LSEG

The Singapore Fintech Festival showed how financial services can build a more dynamic and inclusive society. With rising interest in fintech tools for sustainable business, we examine the crucial role of ESG data for measuring corporate progress.

  1. The Singapore Fintech Festival discussed the role of fintech for improving the lives of individuals and building a more dynamic economy and inclusive society.
  2. Access to the right data will ensure companies seize the opportunities created by a rapidly transforming financial services sector and grow in a sustainable manner.
  3. Refinitiv is supporting customers in this journey by providing them access to ESG data and tools, including over 400 standardized and comparable metrics.

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The Singapore Fintech Festival is only in its fourth year, but has already grown to become the largest fintech event in the world, with 60,000 delegates attending over the five days of the event.

This year’s festival focused on sustainable finance as a key theme, including the power of fintech tools for sustainable business.

Advances in technology have an important role to play in creating global investment opportunities that prioritize sustainable and inclusive growth.

Watch: Refinitiv Perspectives LIVE – ESG Investment, a cure all for Asset Management?

Ravi Menon, Managing Director, Monetary Authority of Singapore, set the tone at the event when he said that fintech was about better ways of doing things, inclusion and benefiting as many people as possible.

He said: “The fintech spirit must always serve a larger purpose to improve the lives of individuals and build a more dynamic economy and a more inclusive society.”

What was clear during the event is how advances in technology have an important role to play in creating global investment opportunities that prioritize sustainable and inclusive growth.

Watch: What does sustainable finance mean to you?

Prioritizing sustainable business

As the world works toward the United Nations’ 2030 Sustainable Development Goals (SDGs), the market for impact investing is now estimated to be over US$502 billion.

According to a Global Impact Investing Network survey, a majority of investors around the world are now linking the performance of all or some of their investments to the UN SDGs.

Even Asia, which has been a laggard in sustainable finance, has witnessed record green bond issuances — worth nearly USD28 billion, as of October 2019, as a growing number of investors embrace environmental, social and governance (ESG) considerations.

While these are significant milestones, one key theme that resonated throughout the fintech festival was the need to make impact investments the new normal.

Financing a sustainable future in Asia. Fintech tools for sustainable business

Download the report: Financing a sustainable future in Asia

However, there are a number of challenges in scaling up sustainable finance.

There is a yawning gap between intent and actions — highlighted by a mismatch between corporate policies and the setting of targets to bring about real improvements.

For instance, more than 60 percent of companies in Refinitiv’s ESG database have a policy to reduce emissions but only a third have specific reduction targets.

This problem underlines one of the key challenges of impact investing — consistently quantifying and measuring success in meeting sustainability goals.

Yet another problem is providing returns that are competitive enough to generate an uninterrupted flow of funding that is crucial to attaining the SDGs.

Watch: What excites you about the future of finance?

Measuring ESG performance

Both these challenges are being addressed by advancements in artificial intelligence (AI) and machine learning, as they help to generate the data that enable the framing of targets and provide the tools to analyze and measure the impact of action over time to drive real change.

Refinitiv’s ESG Data is one such product, including over 400 standardized and comparable metrics — such as corporate performance in areas such as climate change, inclusion and executive pay — and covering 70 percent of global market cap.

ESG Views provides companies with a visual comparison of their performance with that of their peers on various ESG metrics.

The Diversity & Inclusion Index ranks over 7,000 companies to provide insights into company performance and long-term opportunities and risks. The Sustainable Leadership Monitor’s practical benchmarking capabilities allow the measurement and reporting of leadership on several financial and ESG criteria.

Watch: The Sustainable Leadership Monitor from Refinitiv

The positive power of fintech

In summary, the key takeaways from the Singapore Fintech Festival further served to emphasize the positive power of fintech tools and Refinitiv’s belief that sustainable investing is good for business.

As Patrick Donaldson, Head of Market Development, Refinitiv, said: “The future of finance is bringing everything together… to help us plan for the future, and to make ourselves and our families feel financially secure.”

Being tech-ready with access to the right data will help companies make the most of opportunities created by a rapidly transforming financial services sector, grow in a sustainable manner and help build a prosperous and inclusive society.

Learn more about Sustainable Finance solutions from Refinitiv

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