It’s an exciting time for companies and fintechs in the financial services sector. Despite increasing geopolitical and macroeconomic tensions – from rising inflation and interest rates to the Ukraine conflict and a looming global recession – the sector is fast becoming a lynchpin to enable a more prosperous and sustainable future, not only for consumers, businesses, and governments, but for the planet itself.

Singapore is rapidly becoming a key hub for ESG fintech development, with significant support from key market participants, including MAS, investors, and the start-up community and ecosystem partners. We have seen strong participation and interest in the ESG fintech space – and anticipate that this participation will grow over time as the market and ecosystem continues to mature and evolve.

In this initial report launched jointly with the Monetary Authority of Singapore (MAS), we provide transparency on the use cases, investor opportunities, and emerging capabilities where ESG fintech will add value to transition and broader ESG transformation using data. This is the first review globally to put shape and numbers to the nascent segment of ESG fintech.

 

Key summary

 
  • Tackling climate change – a key component of ESG – is the defining challenge of our time. Efforts to address it require a rapid transition to a low carbon economy in order to achieve net-zero targets. 
  • We engaged the fintech industry to map an ESG fintech taxonomy that facilitates the system change needed to address climate change, as well as social and governance issues. This taxonomy defines the fields of play and use cases that fintechs can accelerate to help drive this change.
  • With tailwinds, the ESG fintech segment will achieve 68 percent compound annual growth over the next three years: the fastest and most attractive investment case in the fintech market.
  • Carbon services, green data and market infrastructure, as well as investment management segments represent the largest growth prospects.
  • The sourcing, transformation, and use of data will be the critical enabler for ESG fintech to bridge the real economy and financial sectors.
  • Purposeful expansion of the ESG fintech ecosystem not only drives greater acceleration of capital and liquidity towards ESG causes, but also contributes significant value-add to the real economy.

 

For more details on the research methodology and insights of the ESG fintech ecosystem, download our full report.

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