As the amount of carbon in our atmosphere reaches an alarming 1.5 trillion tons — with more than 50 billion more tons being added each year — the world’s economies are beginning to act.
Corporate Environmental, Social and Governance (ESG) investments have led to both nature- and technology-based progress, but there has been increasing skepticism over the legitimacy and impact of ESG initiatives.
Through the implementation of a trusted fintech solution — specifically the end-to-end blockchain tracking of international carbon credits — ESG investing might be closing in on a strong resurgence.
Nameer Khan is chairman of the MENA (Middle East and North Africa) Fintech Association and founder of Fils, a fintech API and carbon marketplace connecting carbon credit suppliers with high-capital institutional buyers. He recently joined us on Converge to dive deeper into the new era of ESG implementation and today’s carbon marketplace landscape.
Digital assets and carbon credits were “made for each other”
Khan breaks down the role of carbon credits, which typically equate to a single ton of carbon being removed from or prevented from emitting into the atmosphere. Independently verified and registered, a carbon credit can be purchased fractionally through a verified exchange by institutions and private investors.
Such a system, though, is largely dependent on trust because investors want to know how their money is being used to support important and verified causes, Khan says, asking “How do I know a credit wasn’t already sold to 100 people?”
Verification is critical, and blockchain technology can track each ESG investment back to its origin to ensure end-users that it’s ethically sourced and specifically funding a legitimate ESG project.
Trackable ESG could be a new revenue generator
As with most digital assets, the credibility factor is the elusive ingredient to making carbon credit solutions a viable funding source for much-needed initiatives, ranging from renewable energy production to planting trees.
However, when blockchain tracking is applied to those carbon credits, the whole proposition becomes transparent and legitimate, Khan says.
More importantly, he adds that this knowledge of where people’s money is going will become a widely accepted — and demanded — aspect of consumerism. That shift in the corporate and consumer culture will be significant and shed much of today’s ESG fatigue.
“A lot of people have seen ESG as a charity project — it’s not. It’s a revenue driver,” Khan says.
Convera’s commitment to the environment
At Convera, we have paid close attention to our customers’ sustainability preferences and are hard at work developing new strategies to mitigate our environmental impact. That’s why we currently utilize carbon offsetting for our education and hedging products while reviewing other avenues for future initiatives.
“It’s an exciting time to link up with Convera on our ESG journey. We’ve put a lot of groundwork in and this coming year should start to see the fruits of that labor,” said Valerie Rizinger, Convera’s Head of Ethics and Market Compliance.
Although the financial sector’s carbon footprint is small compared to other industries, we believe every step counts to pave the way for a greener future. By keeping in tune with our customer base, we can lead a new generation of sustainable fintech and stay ahead of forthcoming legislation.
“We cannot stand still on such an important issue and we are determined to work with our customers, partners, and communities to strive for positive change.”
Want more insights on the topics shaping the future of cross-border payments? Tune in to Converge, with new episodes every Wednesday.
*The information shared on this blog is for informational purposes only and should not be considered financial advice. Please note that the opinions expressed on Converge are solely the opinions of the host and the guests, not Convera’s.
