Fabian Steiner: Sustainable Fintech and the Future of Finance

ARYZE spoke with Fabian Steiner of thinktank project Sustainable Fintech about what they do and the role of the financial sector broadly in sustainable development. He believes our global financial system will be the locus from which a sustainable future can be leveraged.

Fabian Steiner believes that the financial sector will play a very central role in promoting environmental sustainability. He is the founder and co-lead of Sustainable Fintech, a project of Swiss thinktank Foraus. Foraus was founded by students who wanted to build a new kind of think-tank, which operates in a truly grassroots, ground-up manner. Over the ten years of Foraus’s existance, the model has spread throughout Western Europe, with each branch focusing on various foreign policy issues. 

The Sustainable Fintech project was started four years ago by Foraus members wanting to think in depth about the future of Switzerland’s vast financial sector. Says Steiner:

“They decided there are basically two futures for the financial sector. The first pillar is digitization. The future of finance will be digital and tech driven at some point. The second pillar is sustainability: finance needs to be sustainable.” 

Steiner asserts that Switzerland is best positioned to lead the financial world into this future, due to the scope and influence of the Swiss financial sector, and the environmentalist precedent within the country. 

“The term ‘sustainable finance’ was coined in Geneva, and Switzerland is one of the few countries that has environmental protection anchored in its constitution.” 

Expanding on this potential, Sustainable Fintech hosts events, builds community, and helps Swiss fintech startups to problem-solve. The belief that the financial sector is a key player in global sustainable development is widely held by experts in the field, and was highlighted in the Paris Climate agreement. Said Dr. Patrick Njoroge (2017) governor of the central bank of Kenya:

“Innovations in financial technologies offer the greatest hope for aligning the world’s financial systems with the urgent twin objectives of sustainable development and deepening financial inclusion. Further progress requires the close cooperation of all – innovators, regulators, financial institutions”

Steiner believes we are slowly beginning to see that progress within the financial sector. He cites the purchase of Carbon Delta, a company specialising in pricing carbon risks, by financial giant MSCI inc. as evidence of the industry’s shift towards sustainability: 

“It’s a clear signal from the market that sustainability and fintech is not a niche phenomenon anymore.”

To make real change, though, financial institutions need to do more than just appear to operate in line with the sustainability goals. Says Steiner:

“It’s too late for greenwashing now, so if you’re just trying to jump on the bandwagon by slapping some green things on your product, that will hurt you in the long-term. But there are so many opportunities to provide real value there.”

Not only is it imperative for the earth’s future that the financial industry operates more sustainably, it is also in major corporations’ best interests. According to a 2019 Carbon Delta report, global companies stand to lose 1.2 trillion USD over the next 15 years if implementation of the Paris Climate Agreement is delayed. 

Beyond the promise it holds in building a greener world, Steiner also believes the financial sector will help build a more equitable society. Just last week, Goldman Sachs announced that it will refuse IPOs for companies with all-male boards (Bloomberg 2020). Financial companies appear increasingly willing to use their prolific platform to advocate for social change and a sustainable future, and it is imperative that they do so. For more information about Sustainable Fintech, please visit their website. For more information on the fintech sector, please visit the ARYZE blog. To see how ARYZE is leveraging technology to solve the SDG 9, 10 and 16, please visit our website.

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