GoImpact, a prominent ESG and Sustainability education and EdTech firm, has once again joined forces with The Chinese University of Hong Kong Business School (“CUHK Business School”) for their highly anticipated second collaboration. Together, they have released the groundbreaking Green Fintech Report 2023, entitled “The Intersection of Green, Fin, and Tech: A Study across 5 APEC Economies.” This comprehensive study, supported by Ant Group, delves into the developmental landscape of Green Fintech across five APEC economies: Hong Kong, Indonesia, Thailand, South Korea, and Singapore.
Singapore: Leading the Way in Green FinTech
Singapore, hailed as a regional hub for Green FinTech, is celebrated for its thriving ecosystem and robust collaborations. However, as the sector flourishes, concerns regarding data integrity and the risk of greenwashing remain, underscoring the significance of ongoing vigilance.
Hong Kong: Progress Amidst Challenges
Hong Kong, demonstrating significant progress with government policymaker support and corporate sector collaboration, is making strides in the Green FinTech arena. Nevertheless, Green FinTech startups and SMEs eagerly anticipate improved funding access and structural support.
South Korea: Corporations Take the Lead
In South Korea, corporations are at the forefront of championing the green transition, driven by cross-border regulations, while government involvement plays a substantial role in developing the Green FinTech ecosystem.
Indonesia: A Fertile Market
Indonesia’s market holds promise for exponential growth in Green FinTech. However, outreach and education programs are essential to facilitate widespread adoption.
Thailand: Government Support Needed
Thailand sees corporate engagement as the driving force in transitioning to renewable energy. However, the government is projected to provide more requisite and systemic support.
The Need for Government Regulation in the Growth of Green FinTech
As sustainability takes centre stage globally, governments in the five APEC economies are actively exploring innovative strategies such as carbon taxes and tax incentives for the GreenTech and Cleantech industries and Carbon Markets. However, the regulatory landscape in Asia faces challenges due to ambiguity, differing regulatory frameworks, and misaligned definitions and metrics.
SMEs are grappling with difficulties accessing green financing due to regulatory complexities and resource limitations, despite their potential for driving sustainable growth. Regulatory clarity is crucial for SMEs’ development, countering greenwashing, and increasing credibility and investor trust in sustainable finance. The lack of standardisation in the complex Green FinTech landscape across these markets calls for regional collaboration to establish standardised best practices for ecosystem alignment.
Both the Private and Public Sectors Embrace Green Technologies
Client demand for sustainability, performance, transparency, and accountability is driving a transformative shift in investments. The private and public sectors are actively exploring sustainable and green technologies, such as carbon capture, usage and storage (CCUS) and ESG risk modelling.
AI and machine learning solutions are increasingly adopted by organisations, streamlining ESG compliance, carbon management, and risk assessment. Leading rating agencies like Sustainalytics and Moody’s incorporate AI and machine learning into their analytical frameworks, enabling faster and more accurate analysis of large volumes of data.
Challenges Faced by Green FinTech, Particularly the Critical Shortage of Talent
In addition to the necessity for green finance advancements, the heart of Green FinTech also confronts the challenge of finding talent that can bridge financial, technology, and sustainable knowledge. Corporations dealing with complexities like scope 3 emissions transparency and Net-Zero commitments recognize the strategic imperative of sustainability education and training.
Locations like Hong Kong struggle to recruit ESG experts, highlighting the need for interdisciplinary talent development to drive sectoral progress. Foreign talent, though a temporary solution, brings valuable experience and knowledge to governments and corporations, guiding the establishment, development, and sustainability of Green FinTech ecosystems, steering economies in the right direction.
To overcome these challenges and strengthen the Green FinTech ecosystem, companies should instil authentic ESG awareness beyond compliance, regulatory bodies must collaboratively work towards establishing a regional taxonomy, standards, and policies, and governments should encourage public-private partnerships and ensure comprehensive talent development.
Ms. Helene Li, CEO and Co-Founder of GoImpact, emphasised the importance of cross-sector collaboration and talent development, stating, “It is very clear from the key findings in this second report that cross-sector collaboration and bridging the talent gap effectively will be crucial to advancing the Green Finance agenda. The frequency of extreme weather disasters are strong signals that we need to do more and do it faster, collectively.”
Prof. Kalok Chan, Wei Lun Professor of Finance at CUHK Business School, expressed the institution’s pleasure at collaborating with GoImpact once again, noting, “As one of the leading business schools in Asia, we will also continue cultivating talents with a socially responsible mindset and equipping them with the skills and knowledge to contribute for the betterment of the Green FinTech industry.”
Ms. Jennifer Tan, Executive Vice President, Strategy Development and Government Affairs, Greater Bay Area of Ant Group and Head of 10×1000 Tech for Inclusion, added, “As a company with a long-standing commitment to developing green fintech technologies, Ant Group is proud to support this research for the second consecutive year. We hope that this independent research can offer constructive insights that will catalyse the global growth of green fintech.”
