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Sustainability: A Must for Fintech Growth
Sustainability | Oct 25, 2023
Image: Unsplash/Mert Guller
The escalating reliance on Information Technology (IT) is undeniable, bringing with it a surge in energy demand and a consequential rise in greenhouse gas (GHG) emissions.
Lynn Johannson, an NCFA advisor and a sustainability expert, sheds light on this pressing issue, urging the Fintech industry to rethink its energy strategies and embrace sustainability as a core business value.
The Energy Conundrum Flywheel
The FinTech sector’s dependency on IT is a double-edged sword. On one hand, it drives innovation, efficiency, and accessibility; on the other, it leads to an insatiable demand for energy. Johannson paints a vivid picture of this paradox below, highlighting the direct correlation between increased IT reliance, energy consumption, and GHG emissions. As the sector continues to grow, the sustainability of its energy sources becomes a question that cannot be ignored.
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- Our dependency on IT is growing.
- This will increase the demand for energy.
- This in turn, depending on the energy source, will increase GHG emissions.
- While there will be more regulation to force disclosure and reporting on Scope 1, 2 and 3, emission, the bigger issue is more GHGs will lead to a more unstable climate.
- The more unstable the climate, the more weird, wild weather.
- The more weird, wild weather, the more their will be power overages, power blackouts, which means
- This will adversely affect Fintech businesses who depend on energy to operate.
The Domino Effect of Climate Change
The repercussions of increased GHG emissions extend far beyond the confines of the Fintech industry. Johannson eloquently connects the dots between GHG emissions and climate instability, leading to erratic weather patterns and power disruptions.
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For a sector that thrives on constant connectivity and uninterrupted service, the implications are profound. Power outages and energy instability could limit essential financial services, leaving consumers in the lurch and businesses at a standstill.
A Call to Energy Efficiency
Johannson’s message is clear: optimizing energy use is not just a good practice; it is an imperative for survival and relevance in the Fintech sector. The industry must proactively seek ways to reduce its energy footprint, investing in renewable energy sources and embracing energy-efficient technologies. This shift is not just about mitigating risks; it is about creating a resilient, sustainable business model that is prepared for the future.
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While certificate programs in sustainability are becoming more prevalent to bridge sustainability knowledge gaps, Johannson warns against the pitfalls of ‘competence greenwashing’. True expertise in sustainability requires more than a cursory understanding of the concepts; it demands a deep, nuanced knowledge that can only be acquired through extensive experience and learning. As Malcolm Gladwell’s 10,000-hour rule suggests, mastery in sustainability is a journey, not a destination.
Clarion Call for the Fintech Sector
The Fintech sector must seize the the opportunity to redefine its role in the global sustainability narrative. By investing in genuine sustainability education, adopting energy-efficient practices, and committing to transparent, responsible energy use, the industry can set a new standard for sustainable business. The path forward is clear, and the time to act is now.
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Lynn Johannson’s insights serve as a clarion call for the Fintech sector, highlighting the urgent need for a strategic shift towards sustainability and energy efficiency. The industry has the tools, the technology, and the expertise to make this transition; what it needs now is the collective will and commitment to build a sustainable future. The journey towards sustainability is not just a business strategy; it is a moral imperative, a commitment to future generations, and a testament to the resilience and innovation that defines the Fintech sector.
Infographic: Tech Target
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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