Impact Tech | December 8, 2020

Can fintech startups combat climate change?

Amy Cortese
ImpactAlpha Editor

Amy Cortese

ImpactAlpha, Dec. 8 – Financial technology has transformed how we pay for things, invest,  raise money, and assess risk. A new focus: making sure all of those activities are green.

A new report by New Energy Nexus plots the emerging ‘climate fintech’ sector and its potential to speed up decarbonization. A confluence of trends make the moment ripe for green fintech, including a surge of interest in sustainable investing, declining costs for renewables and the accelerated use of digital tools due to COVID, New Energy Nexus’ Aaron McCreary told ImpactAlpha.

“All of that makes us excited about this as an ecosystem to nurture and encourage participation in,” he said.

The nonprofit, known for its global cleantech accelerator programs, hopes to launch climate-focused fintech accelerators with partners in the U.S., Europe and China by the summer.

Last week, New Energy Nexus announced a climate-tech accelerator, Third Derivative, with the Rocky Mountain Institute.

Early stage. The “Climate Fintech” report tallies 250 startups in Europe, the U.S. and China working at the intersection of fintech and climate. They range from Ecountabl, a tool that helps people buy from sustainable brands, to crowdinvesting platforms like Ecologico, Trine and RaiseGreen, to Carbon Delta, a climate risk evaluation tool.

Three-quarters of the climate fintechs are early stage, with less than $10 million in funding. About 15% have raised more than $10 million. Another 10%, including Carbon Delta, which is now part of index provider MSCI, have been acquired.

Blockchain. The latest to jump in: Apple cofounder Steve Wozniak. His new venture, Efforce, is a blockchain-based marketplace to finance energy efficiency projects. Efforce, which uses a digital token called WOZX, is “the first decentralized platform that allows everyone to participate and benefit financially from worldwide energy efficiency projects, and create meaningful environmental change,” said Wozniak.