Can Fintech Help Save the Planet? Discover the Sustainable Future of Finance!

As the world grapples with the challenges of climate change and environmental degradation, every sector is being called upon to contribute to a more sustainable future. Fintech—at the crossroads of finance and technology—is uniquely positioned to drive this change. For Australian superannuation trustees and wealth management executives, understanding how fintech fosters sustainability is crucial. Investors and members are increasingly demanding not just returns, but ethically and environmentally responsible practices.
This article delves into the various ways fintech is shaping a sustainable future, the challenges it faces, and the opportunities it presents for trustees overseeing superannuation and wealth management.

How Fintech is Driving Sustainability
Fintech is transforming the financial landscape by embedding sustainability into its core operations. From apps that track personal carbon footprints to platforms facilitating green investments, fintech is empowering individuals and institutions to make more eco-conscious decisions.
Australian Examples
In Australia, platforms like Australian Ethical Investment and Up Bank have gained popularity for their focus on sustainability. Up Bank, for instance, helps users understand the environmental impact of their spending habits by integrating carbon footprint tracking directly into their banking app.
For Trustees:
Trustees can harness these tools to engage members and align their offerings with growing preferences for sustainable financial solutions. Members are more likely to remain loyal when their financial institutions align with their values.

Green Investment Platforms
What Are They?
Green investment platforms focus on channelling funds into environmentally friendly initiatives such as renewable energy, sustainable infrastructure, and companies with strong environmental, social, and governance (ESG) metrics.
Examples
• Future Super: An Australian superannuation fund that avoids investments in fossil fuels and prioritizes ethical companies.
• Spaceship Earth Portfolio: Targets companies actively addressing sustainability challenges.
For Trustees:
While green investments align with member values, trustees must also balance these against financial returns. The perception of sustainable funds often being less profitable is shifting, as many green investments now outperform traditional options.

Fintech’s Role in ESG Compliance
The Importance of ESG
ESG metrics are the backbone of sustainable investing, enabling investors to measure a company’s environmental impact, social responsibility, and governance practices. Fintech simplifies this complex process by providing automated tools for data collection and analysis.
Australian Context
In Australia, APRA (Australian Prudential Regulation Authority) has called for greater transparency around climate-related risks. Superannuation funds must now demonstrate how they integrate ESG into their investment strategies.
For Trustees:
Fintech platforms such as ESG-focused analytics tools can help trustees meet these regulatory demands while making data-driven decisions to benefit members. However, staying ahead of evolving ESG standards remains a challenge.

Carbon-Neutral Fintech Companies
Leading by Example
Several fintech companies are achieving carbon neutrality, demonstrating how businesses can integrate sustainability into their operations.
• Stripe Climate: Allows users to allocate a percentage of their payments to fund carbon removal technologies.
• Australian startups like Volt Bank and Judo Bank are exploring green initiatives to reduce their operational footprints.
For Trustees:
Collaborating with carbon-neutral fintechs not only aligns with sustainability goals but also enhances reputational value.

Sustainable Payment Systems
Eco-Friendly Transactions
Payment systems are becoming greener by adopting digital-first solutions, reducing paper waste, and supporting environmentally focused projects.
Examples in Australia
• Basiq: This fintech integrates sustainability features into its payment systems, offering solutions that reduce environmental impact.
• Digital wallets and contactless payments are now widely accepted as greener alternatives.
Challenges for Trustees:
While transitioning to sustainable payment systems is essential, trustees must ensure seamless integration with existing platforms and educate members on these changes.

Ethical AI in Fintech
The Role of AI
Artificial intelligence can optimize investment portfolios, automate reporting, and monitor compliance with ESG standards. However, its use must align with ethical considerations to avoid perpetuating greenwashing or bias.
For Trustees:
Trustees should prioritize fintech solutions that incorporate ethical AI practices. Transparent algorithms and rigorous oversight are essential to maintain member trust.

Helping Aged Care Through Fintech Innovations
Supporting an Aging Population
Australia’s aging population poses challenges for financial sustainability. Fintech can simplify financial planning for aged care, ensuring that older Australians can access the resources they need.
Mercer CALM as an Example
Mercer’s Care & Living with Mercer (CALM) platform exemplifies fintech’s potential in aged care. It helps members navigate complex decisions, providing:
• Personalized recommendations for aged care options.
• Transparent breakdowns of costs.
• Financial planning tools for long-term security.
Challenges:
Trustees must consider integration complexities and member education to maximize the utility of tools like CALM.

The Role of Fintech in Fighting Climate Change
Fintech solutions are enabling innovative climate-focused initiatives, such as crowdfunding for renewable energy projects and micro-loans for sustainable businesses.
Australian Examples:
Platforms like GoFundraise allow individuals to support local climate initiatives, while peer-to-peer lending is gaining traction for funding renewable energy ventures.
Opportunities for Trustees:
By integrating these platforms into their offerings, trustees can support impactful climate projects while diversifying investment portfolios.

A Negative Case Study: ASX Blockchain Chess Replacement
Not all fintech innovations succeed. The failed attempt by the ASX to replace its Clearing House Electronic Subregister System (CHESS) with blockchain technology is a cautionary tale.
What Happened?
The project, aimed at modernizing the ASX’s infrastructure, faced significant delays, cost overruns, and technical challenges before being abandoned in 2023.
Lessons for Trustees
• Thorough Vetting: Trustees should ensure any fintech project is backed by robust feasibility studies.
• Risk Management: Over-reliance on unproven technology can undermine trust and result in financial loss.

The Future of Eco-Friendly Fintech Startups
Trends to Watch
• Climate-focused fintech incubators in Australia.
• Startups prioritizing sustainability from the outset.
Opportunities for Trustees:
Investing in or partnering with eco-friendly fintech startups can position superannuation funds as leaders in sustainability.

Conclusion
Fintech is not just transforming finance—it’s offering a pathway to a more sustainable future. For Australian trustees and wealth managers, the adoption of sustainable fintech solutions represents an opportunity to align with member values while addressing global challenges.
Call to Action:
Trustees must take proactive steps to explore and integrate these innovations, ensuring they meet their fiduciary duties while championing sustainability.

Endnotes