Why ESG must be at the heart of Scotland's Fintech Future

Scotland’s financial technology sector continues to thrive and is well-placed to capitalise on the opportunities presented by the shift towards more responsible business practices, a Scotsman webinar heard.

© FREE WEBINAR: Why ESG must be at the heart of Scotland’s Fintech Future

WATCH: As easy as ABC? Why ESG must be at the heart of Scotland’s Fintech Future – free webinar now available to watch on demand, see the video above, or CLICK HERE.

The The number of financial technology (fintech) businesses in Scotland has grown from 119 at the start of the pandemic in March 2020 to 181 now.

And there are significant market opportunities in the ESG (Environmental, Social and Governance) field, as business places a stronger focus on its wider contribution to society.

The webinar – As easy as ABC? Why ESG is vital to Scotland’s fintech future – heard pressure on businesses to show meaningful commitment to ESG was intensifying, both from consumers and regulators.

However, speakers said there was still a lack of agreed common standards to identify which organisations were taking ESG seriously – and which might be engaged in ‘greenwashing’.

Caroline Stevenson, Head of the Financial Services Regulatory Team at legal firm Burness Paull, warned that a business which made statements about ESG credentials which later proved false could be in trouble: “If a firm has badged an investment fund as particularly green in some way [because they know it’s what customers want], and says it’s sustainable and if it transpires that it’s not, there’s definitely the potential for a mis-selling claim.”

© Webinar host David Lee

And Gbenga Ibikunle, Professor and Chair of Finance at the University of Edinburgh, said it was hard for investors to identify clearly which businesses were genuinely pursuing ESG goals across their business. “There is a lack of coherence around standards for measuring ESG and reporting is also poor,” he said. However, he said this opened up “great opportunities for fintechs to provide information on how ESG-compliant different investment portfolios are”.

Jo Freeman-Young, a Manager and specialist in ESG at EY, said there had been a “big acceleration of activity around ESG” and some large financial services players were starting to set targets and embedding ESG across their activities – but there was “a wide range of maturity”. Market leaders were driving the ESG agenda from Board level in a strategic and coherent way and engaging customers around ESG through new products. She added: “That requires a lot more data, and a lot more innovation and digitalization, and that’s where the opportunity really starts to come in for Scottish fintechs.”

She identified two potential growth areas for fintechs, saying: “There is a real lack of ESG information on unlisted companies and a lack of metrics to show how organisations are doing in terms of their biodiversity impact, as well as their climate impact.”

Freeman-Young agreed an absence of common ESG standards was a problem. “There are a lot of challenges around ESG data and not a lot of trust,” she said. “There can be as little as zero correlation between ESG ratings providers and that makes it difficult to get behind the data and use it for investment decisions. There is talk of a standardised framework but we haven’t got an answer yet. Some ask if we can have that when so much ESG is so specific to the firm.

“One financial firm might need a different score to another one….so it’s difficult for the regulator to really step in when there isn’t consensus.”

Gallery: 25 jobs that will never disappear (Espresso)

Caroline Stevenson agreed. She said: “It’s really difficult to work out who’s market-leading when it comes to ESG because it’s so very subjective. There’s no real benchmark and I think part of the struggle is the fact that regulators aren’t really sure how they can regulate this or supervise this without clear goalposts.”

Nicola Anderson, Chief Executive of FinTech Scotland, said the financial services and fintech communities had to take a lead in defining standards. She said harnessing the data available and using it effectively was crucial in making ESG standards meaningful – and she felt Scotland had a real advantage here because of its great strength in data-driven innovation.

She said: “We know there’s real power in financial transactional data, and the insights you can get from that. But if we couple that with other types of datasets [like space and satellite data] and aggregate that, we start to put some of these greenwashing questions on the table and think about innovations to help us build confidence in the ESG claims businesses are making.”

The panel thought that large financial services organisations showing real leadership in terms of ESG was crucial.

Kirsteen Harrison, Environmental Manager at cryptocurrency wallet business Zumo, said: “This agenda is moving very rapidly and there will be a ‘cascading down’ of ESG from large financial services institutions. This is coming fast down the supply chain and firms can’t afford to wait.”

Nicola Anderson agreed and said the fintech community was well-placed to take advantage. She said there was clear evidence of greater collaboration between large financial services firms and young fintech businesses who could provide technology solutions in areas where larger institutions needed to make processes quicker and more efficient.

“There is a real change in culture and mindset [towards ESG],” she said, stressing that this would only accelerate.

She praised the new partnership between the Royal Bank/NatWest Group and the Edinburgh Climate Change Institute, to create climate change leaders across the business community.

Gbenga Ibikunle highlighted the University’s work with financial services organisations, and noted NatWest was working with CoGo, a company set up to measure carbon footprints. This was part of a wider trend towards sustainable finance, he said, adding: “Climate change-related economics and finance is definitely one of the key areas right now, which of course corresponds to the first letter in ESG. There is a great deal of enthusiasm among fintech start-ups, as well as established financial services companies, to get involved and take the lead in addressing climate change by developing new technological applications and exploiting the explosion of transactional data in the global economy.”

Kirsteen Harrison said that Zumo had embedded ESG goals right from its launch and this made things easier as it was tougher to ‘retrofit’ ESG. “Young fintech businesses must make ESG part of their culture; staff and customers will thank them for it,” she said.

Having that ESG culture was “imperative” for young fintech businesses looking for investment – as investors would increasingly demand it, Harrison added.

However, Ibikunle said the link between ESG investing and good profit margins was still weak: “A lot of the investment in ESG now is because there are investors keen on contributing to society in a positive manner, rather than being driven by economic factors. The overlap between the doing good part of ESG, and the need for profit is still way too small for ESG to be meaningful [in investment decisions] at this time.”

Nicola Anderson said the 180-plus fintechs in Scotland were working across a wide variety of fields.

She mentioned wealth management, payments, regulation, capital markets, personal finance and serving the SME community as strong growth areas.

“I’m very proud of the way that fintechs have stepped up to the mark,” she said, adding that they had been agile and adapted to change at a really difficult time.

There was strong international engagement, too, she said, with around 25% of Scotland’s fintech community having international HQs and around 50% having plans to sell internationally.

Caroline Stevenson said fintechs had benefited from more people exploring financial technology for the first time during the pandemic. “Fintech is going to have an upward trajectory and certainly from our experience, it continues to be really investable.”

However, she sounded a note of caution around delays at the Financial Conduct Authority (FCA). “A number of fintechs engage in regulated activities and need authorization from the FCA. The increased workload of the regulator means there are huge backlogs of work, so in areas such as the authorizations team or change of control, we are seeing huge delays and this is having real cash flow issues for some fintechs. They might have some really amazing technology that’s sitting waiting, and they can’t start operating until they get the relevant permissions, and we can see some firms starting to sort of run out of the cash supplies and we need to help the FCA expedite the backlog.”

Internet Explorer Channel Network
News Related


Video: Ex-MSNBC host brands Condoleezza Rice a 'soldier for white supremacy' because she condemned Critical Race Theory on The View 

Read more »

Kim Kardashian calls Kanye West 'the most inspirational person'; Here's why

© Provided by Pinkvilla Kim Kardashian and Kanye “Ye” West have a beautiful friendship, and the two of them make sure to talk about all positive things about each other ... Read more »

Bade Achhe Lagte Hain 2, 25th October 2021, Written update: Priya and Ram's honeymoon suite

© Provided by Pinkvilla In today’s episode, Ram calls Adi and asks him what should be done, since he cannot take her home drunk. Adi books a business suite for ... Read more »

KJ Apa & Clara Berry SECRETLY tied the knot after welcoming baby? Here's why fans think so

© Provided by Pinkvilla Riverdale star KJ Apa and Clara Berry may be married already! The actor sent fans into a frenzy when he referred to Clara as his wife ... Read more »

The best deals to shop for Macy's Friends & Family sale going on now

Ladies and gentlemen, get excited, because Macy’s Friends & Family sale is back. Score 30% off of select home, shoes, handbags and more, 25% off of watches and luggage, 15% ... Read more »

3 Ways to Support a Loved One With Multiple Sclerosis

© The Mighty Daughter walking with senior woman in park. My mother was diagnosed with multiple sclerosis in the early 2000s. Since then, it has been a roller coaster ride ... Read more »

Maryland thief abandons stolen car after discovering two kids in back seat

A car was reportedly stolen at this BP gas station. Google Maps A thief who stole a car at a Maryland gas station abandoned the car after discovering two children ... Read more »

A short-seller says the party is over for Digital World Acquisition Corp. after stunning rally, and that Trump, not the SPAC shareholders are in control

© James Devaney/GC Images Former US President Donald Trump leaves Trump Tower in Manhattan on July 19, 2021. James Devaney/GC Images James Devaney/GC Images Short-seller Iceberg Research said it is ... Read more »

Heidi Klum, 48, Flashes Her Sculpted Abs In Lingerie For Date Night Prep

Heidi Klum looked absolutely fierce as she prepped for date night this past weekend. The 48-year-old supermodel and America’s Got Talent host just dropped a series of va-va-voom photos on ... Read more »

Investors poured a record $1.5 billion into crypto funds last week as the first bitcoin ETFs kicked off trading

© Thomas Trutschel/Photothek via Getty Images Bitcoin. Thomas Trutschel/Photothek via Getty Images Investors poured a record $1.5 billion into the crypto market last week as the first-ever bitcoin ETF kicked ... Read more »

Harrison Ford Made a Very Relatable Travel Mistake in Sicily — but a Kind Tourist Saved the Day

Action movie stars… they really are just like us! Harrison Ford was in Sicily to film the latest Indiana Jones installment when he lost his credit card on Thursday. Thankfully ... Read more »

‘Insulate Britain risk lives' Grant Shapps says another injunction is granted against protesters

© PA Wire Protesters from Insulate Britain blocking a road near Canary Wharf – PA Wire Grant Shapps said another injunction has been granted against Insulate Britain protesters. The Transport ... Read more »

PSG star ‘honoured' after club rejected Chelsea proposal in the summer

© PA Images Marquinhos and Neymar celebrate after PSG goal against Man City in the Champions League A key Paris Saint-Germain star has reacted to his transfer links with Chelsea ... Read more »

Sexy in the city: A review of the Mondrian Shoreditch London hotel, an Accor Live Limitless property

© Provided by The Points Guy MSN has partnered with The Points Guy for our coverage of credit card products. MSN and The Points Guy may receive a commission from ... Read more »

Of Giraffes and Humming in the AfroAsian Seas: Ari Sitas in conversation with Jade Gibson

© Copyright (c) Daily Maverick , All Rights Reserved For decades Ari Sitas has made a point, way beyond his academic standing, of challenging the way we appreciate words, poetry, ... Read more »

Judicial inquiry into the handling of Eric Garner's arrest begins

A judicial inquiry into the handling of Eric Garner’s arrest began Monday with two NYPD cops answering questions under oath about their involvement in the fatal 2014 arrest. Garner’s mom, ... Read more »

Egypt's president says he will not extend state of emergency

Egypt’s president said he will not extend the state of emergency that had been imposed across the country for more than four years. © Zsolt Szigetvary Egyptian President Abdel Fattah ... Read more »

Furore erupts over MPs voting to dump raw sewage into seas and rivers - but what is the Environment Bill and who voted against it?

MPs have complained of online abuse after Conservatives voted against a bill which would crack down on water companies pumping raw sewage into the UK’s rivers and seas. © Thames ... Read more »

TMKOC, 25th October 2021, Written Update: Jethalal is angry

© Provided by Pinkvilla In today’s episode, Taarak’s boss is irritated with him after hearing the poetry he wrote. Taarak considers seeking Jethalal’s assistance after getting into trouble at the ... Read more »

"He wanted to go": Sky Sports journo drops claim on "not massively happy" £40.5m-rated THFC ace

© GiveMeSport p1fir8iip81udp132lvpj1adi75cf.jpg Michael Bridge doesn’t reckon that Tanguy Ndombele is very happy at Tottenham and has urged the midfielder to “knuckle down”. Ndombele was linked with a return to ... Read more »

Kristen Stewart looks back at her ‘total crapshoot' career, says she's made 5 good films

© Provided by Pinkvilla Hollywood actress Kristen Stewart recently chatted with The Sunday Times and opened up about her career. While looking back, the 31-year-old Spencer actress shared that most ... Read more »

Alec Baldwin's wife Hilaria breaks silence after fatal shooting on Rust set

© Provided by Cover Media Alec Baldwin Alec Baldwin’s wife Hilaria Baldwin has broken her silence following the tragic death of Rust cinematographer Halyna Hutchins. Last Thursday, the 30 Rock ... Read more »

Moon landing return! NASA sets date for first lunar launch since Apollo missions

The uncrewed Artemis 1 launch next year will pave the way for the next man and first woman to walk on the Moon since the end of NASA’s Apollo era. ... Read more »

The NYC Apartment From 'Succession' Just Hit the Market for $23 Million — Take a Look Inside

In October, HBO dropped the third season of Succession, a drama following an extremely wealthy family as they fight amongst themselves for control of their company, Waystar RoyCo, a global ... Read more »

12 Advanced GPS Watches for Runners

Today’s powerful GPS watches have all the sport-specific features to track every stride on the roads, but they’re also packed with other sensors and technology to keep you connected the ... Read more »

'GamesMaster' on E4 — everything we know about the rebooted tech show

© Provided by WhatToWatch GamesMaster host Trevor McDonald GamesMaster is headed back to our screens for the first time since 1998, with a brand new host and new celebrities ready ... Read more »

With Insecure, Issa Rae Broke Down Doors for Black Creatives—And She's Keeping Them Open

© HBO In the world of creative storytelling, Issa Rae is an icon. Over the last five years, she’s catapulted her Awkward Black Girl image to prominence and created a ... Read more »

Thug who Googled 'how to kill a baby' then fed newborn drugs is jailed

© Provided by Daily Mail ( A thug who Googled ‘how to poison a baby’ then fed a newborn girl prescription drugs has been jailed for more than 25 years. ... Read more »

Disneyland Tickets Just Got More Expensive — Here's the Best Way to Save

It’s about to get a little more expensive to visit the Happiest Place on Earth. © Provided by Travel + Leisure Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images On ... Read more »

Six reasons the Leafs are sputtering through six games

It was real easy to reach for the comparison.  The opponent, the trappings, the one dissenting performance from an individual standpoint from the one player, Jason Spezza, who can avoid ... Read more »

Edoardo Mapelli Mozzi shares rare photo of son Wolfie taken on family trip to Greece

Princess Beatrice‘s husband Edoardo Mapelli Mozzi has shared a sweet and very rare photo of his son Christopher “Wolfie” Woolf from the family’s trip to Greece this week. The dad ... Read more »

Pandemie in Deutschland: Merkel gesteht ihren grössten Corona-Fehler

In Deutschland steigen die Corona-Zahlen wieder. Angela Merkel, die als Kanzlerin das Land durch die Krise führte, tritt bald ab. Und nennt zum Ende ihrer Kanzlerschaft den grössten Fehler während ... Read more »

The mother of the 10-year-old Black girl who was arrested after drawing a picture in school says her daughter 'was not protected in any instance'

© Google Maps Honowai Elementary School in Waipahu, Hawaii Google Maps The mother whose 10-year-old was arrested over a drawing said she does not feel her daughter was protected. Last ... Read more »

Ernie Hudson Heartbroken Over ‘Rust' Shooting, Says He Can't Watch ‘The Crow'

© Everett Collection Ernie Hudson The Crow Ernie Hudson, like the rest of Hollywood, is reeling from last week’s deadly shooting on the set of Rust where a gun discharged ... Read more »

RHONJ's Melissa, Joe Gorga Make Predictions About Teresa's Wedding to Luis

Getting ready for the big day! Following Teresa Giudice’s engagement to Luis Ruelas, Melissa Gorga and Joe Gorga are already predicting that the wedding will be one of a kind. ... Read more »

Mortgage rates: How to lock in your mortgage and secure low rates before they rise

A booming property market has led to ‘rock-bottom’ mortgage rates since the start of the pandemic, though a recent announcement from the Bank of England‘s governor has sparked fears this ... Read more »

Facebook whistleblower 'shocked' at focus on metaverse

Facebook whistleblower Frances Haugen on Monday said she was “shocked” to learn that the tech giant was putting resources into its metaverse project rather than safety initiatives. © Getty Images ... Read more »

Hilaria Baldwin breaks silence, shares message following 'Rust' tragedy

"It's impossible to express the shock and heartache of such a tragic accident." Read more »

Carson Palmer blurts out Mike Tomlin as a candidate for USC job, “if he wants out”

© Provided by NBC Sports Well, Mike Tomlin has something to talk about at his weekly Tuesday press conference. USC is looking for a new coach. Former USC quarterback Carson ... Read more »

Penguins' Sidney Crosby 'whole lot closer' to making season debut

Fans of the Pittsburgh Penguins were understandably concerned to learn ahead of the weekend that superstar Sidney Crosby seemingly wasn’t nearing making his season debut as he worked to recover ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic