Hong Kong and Singapore are leading the five economies in Asia-Pacific Economic Cooperation (APEC) in green fintech development, according to a joint paper by ESG and sustainability education firm, GoImpact, and the Chinese University of Hong Kong’s Business School (“CUHK Business School”). 

This puts them ahead of other APEC powerhouses, including Indonesia, the Republic of Korea, and Thailand.

What is green fintech? 

The report indicated that green fintech should consist of three elements, environment, finance, and technology. The terminology focuses primarily on the four essential players within the ecosystem: green fintech startups; government/quasi-government organisations; green-fintech-related associations; and financial institutions.

What makes a fintech “green” is when financial services and products are deployed after considering the environmental factors that come into play in their operations. It also aims to promote and stimulate sustainable investments while limiting the sector’s carbon footprint.

The Monetary Authority of Singapore (MAS) coined green fintech with their own “Project Greenprint,” a collection of initiatives aiming to harness technology and data to enable a more transparent, trusted, and efficient ESG ecosystem for green and sustainable finance.

Green fintech in Singapore

As part of the 2021 budget statement, Singapore launched “The Singapore Green Plan 2030” – prioritising sustainable development, tackling climate change, and positioning Singapore to achieve net-zero emissions within the shortest timeframe.

Project Greenprint is one of the critical projects in the region that focuses on growing a vibrant green fintech ecosystem, driving partnerships across financial institutions and solution providers, and developing digital infrastructure to enable the flow of valuable data better.

Singapore’s current crop of green fintech startups includes CO2 Connect (CO2X), the country’s first inclusive one-stop platform that leverages technology to drive sustainability, using data acquisition technology over a data analytics platform and blockchain layer. The company has partnered with national household names such as Tiong Seng group, UOB, and EY.

Another notable green fintech startup in the island nation is STACS, which aims to achieve holistic and forward-looking ESG certifications and data from various verified sources and industry sectors via a single registry. 

The firm uses its platform, Vetta, which brings digitalisation and automation to the financial sector, unlocking value via automated concurrent processing, real-time perpetual reconciliation, and effective multi-asset lifecycle management.

The joint report highlights Singapore’s position in various sectors, ranking first out of 118 in the Smart City Index and 16th out of 84 in the Global Green Finance Index.

 Green fintech in Hong Kong

Similar to Singapore’s MAS, the Hong Kong Monetary Authority (HKMA) is essential for building out green fintech in the city. Together with the Securities and Futures Commission, HKMA set up the Green and Sustainable Finance Cross-Agency Steering Group to advance the city’s green and sustainable finance (GSF) initiatives and help the financial ecosystem’s transition towards carbon neutrality.

Alinfra is one of the green fintech startups in Hong Kong. Alinfra Climate helps firms calculate their carbon footprint, report environmental performance, undertake green finance, and monetise digital environment financial products with their solutions. 

Meanwhile, Alinfra Digital, an asset tokenization platform to digitise green financial products and improves transparency and auditability, firms in Hong Kong will have a comprehensive solution to address their environmental, social, and corporate governance (ESG) requirements.

Carbonbase is another green fintech startup based in Hong Kong that addresses corporate carbon footprints and attends to individuals looking to become climate positive and become more educated on the carbon climate. 

Corporate solutions include carbon management tools and a green employee engagement plan which claims to be the first-ever non-fungible token (NFT) employee benefit that uses carbon offsets to provide value to the company and its workers. Carbon climate education allows individuals to participate in events and seminars organised by The University of Hong Kong, Greenlight Festival, and fintech festivals. 

Meanwhile, Project Ark is an online marketplace for (NFT) art that directly funds social impact projects to protect biodiversity and charge climate change-related conservation projects worldwide. 

Due to these efforts, Hong Kong came second out of 64 nations in Digital Competitiveness 2021 and number nine out of 264 in the Global Index Rankings – City 2021.

The GoImpact working paper clearly shows that funding and technology are the twin drivers pushing this positive change for the fintech ecosystem. It also shows that Singapore’s and Hong Kong’s leadership in these areas and tangible projects already in motion are assisting the island financial hubs in spearheading green fintech momentum among the APEC territories.

Featured image credit: Edited from Freepik