Fintech Goes Green
By Sunny Lewis
NAIROBI, Kenya, February 7, 2017 (Maximpact.com News) – A UN-backed app is transforming green finance. At the World Economic Forum in Davos in January, the UN Environment Programme and Ant Financial Services Group, the Chinese online and mobile financial services provider, unveiled the Green Digital Finance Alliance, a joint initiative to stimulate the advancement of digital technologies in green finance.
Erik Solheim, executive director of the Nairobi-based UN Environment agency, formerly UNEP, says the new endeavor will rely on “fintech,” the evolving intersection of financial services and technology.
“The Green Digital Finance Alliance is a unique partnership,” said Solheim, “ensuring that we can align tomorrow’s fintech-powered global financial system with sustainable development.”
At the Green Digital Finance Alliance launch in Davos, Switzerland, from left: Erik Solheim, Under-Secretary General and Head, UN Environment, Doris Leuthard, President, Swiss Confederation, Eric Jing, CEO, Ant Financial Services Group, January 19, 2017 (Photo courtesy Green Digital Finance Alliance) posted for media use
Through market innovation, collaborative action and public awareness, the initiative aims to drive environmental risks, opportunities, incentives and choices into decision-making across the financing value chain.
Ant Financial Services is the first Chinese company to drive a global public-private partnership. Currently, there are 72 million users participating in Ant Financial’s app, called Alipay.
Alipay is a digital financial platform that provides users with a carbon account in addition to their credit and saving accounts.
Ant’s 450 million users can benchmark their carbon footprint and earn “green energy” credits for reducing their footprint, for example, by taking public transit instead of driving.
In addition, Ant Financial has integrated this function into a social media experience, as well as committing to a complementary, tree-planting carbon offset program.
The app is proving to be wildly popular. The number of people that signed up on the day preceding the Green Digital Finance Alliance was nearly the equivalent of the entire population of Switzerland.
Every day tens of millions of users go to their Ant Forest to grow their virtual trees while reducing carbon emissions.
UN General Assembly President Peter Thomson of Fiji told a Davos audience at the launch that his office is organizing a series of events aimed at bringing international discussion of sustainable finance into the United Nations.
“Given the trillions of dollars that will be needed to finance the Sustainable Development Goals, initiatives like this are essential to ensuring technological developments contribute to the greening of the global financial system, and to achieving a sustainable future for humanity,” said Thomson.
“Innovative partnerships like this, which align UNEP’s cutting-edge research with Ant Financial’s expertise in providing inclusive financial services, are central to global efforts to scale up implementation of the 17 Sustainable Development Goals,” Thomson said.
“Thankfully,” he said, “the transformation towards a sustainable financial system is already underway, with many governments, regulators, central banks, institutional investors and private companies starting to align their operations with the principles of sustainability.“
“Such efforts need to be scaled up. Digital technologies have the potential to accelerate this transformation – particularly for low-income countries, and small and medium enterprises,” he said.
“To this end, in April I will be convening an SDG Financing Lab in New York which will examine existing financing mechanisms for the Sustainable Development Goals, and how they can be best applied to each goal.“
“We are already seeing fintech disrupt traditional practices in the banking, insurance and microcredit sectors, open new markets in energy, agriculture and health, and contribute to enhancing transparency and accountability,” Thomson said.
Ant Financial CEO Eric Jing said, “Ant Financial is a strong believer in green finance. Several of our products and services have been contributing to sustainable development.“
“Leveraging mobile Internet, cloud computing and big data, we can encourage our hundreds of millions of users to participate in a green lifestyle. We hope that the Green Digital Finance Alliance will contribute to shaping and accelerating this development.”
“Getting finance at the right price to the right people at the right time will be critical in both securing clean energy access for all and meeting the climate change challenge,” said Rachel Kyte, a former World Bank executive, who is now CEO of the UN Decade for Sustainable Energy for All, Sustainable Energy for All (SE4ALL).
“Digital finance can be a powerful tool for unlocking barriers to investment and empowering people to meet the challenge and seize the opportunity of clean, affordable future,” said Kyte. “This Alliance will I hope help to catalyze finance so that we transform lives, create jobs, clean air, provide energy, and restore landscapes at the speed and scale needed.“
Swiss President Doris Leuthard said, “This is just the beginning!“
The Green Digital Finance Alliance is tentatively scheduled to release its first round of global digital green finance practice reviews at the International Monetary Fund annual meeting in October 2017.
The Ant Forest Program will combine the early tests of UNEP’s carbon emissions measurement and the innovation of carbon abatement incentives and present the results to global alliance members to start interaction.
Ant has been able to encourage hundreds of millions of users to participate in a greener and greener lifestyle using technology such as mobile Internet, cloud computing and big data.
The Ant Financial Services Group, the parent company of the global mobile payment platform Alipay, directs its efforts towards serving small and micro enterprises, as well as consumers.
With the vision of bringing “small and beautiful changes to the world,” Jing says Ant Financial is dedicated to “building an open ecosystem of Internet thinking and technologies” while working with other financial institutions to support the future financial needs of society.
Businesses now operated by Ant Financial Services Group include Alipay, Ant Fortune, Zhima Credit and MYbank – and this year, Ant is expanding its network with the acquisition of the the publicly-traded Texas-based company MoneyGram, a global provider of innovative money transfer services.
Valued at approximately US$880 million, the transaction announced January 26 will connect MoneyGram’s money transfer network of 2.4 billion bank and mobile accounts and 350,000 physical locations with Ant Financial’s users.
Moneygram will leverage Ant Financial’s global presence and existing network to serve more than 630 million users, including 450 million with Alipay and 180 million with India’s leading mobile payment provider Paytm.
The transaction will help expand Ant Financial’s business in new global markets following its recent partnerships with Paytm in India and Ascend Money in Thailand.
“The acquisition of MoneyGram is a significant milestone in our mission to bring inclusive financial services to users around the world,” said Jing. “We believe financial services should be simple, low-cost and accessible to the many, not the few.“
“The combination of Ant Financial and MoneyGram will provide greater access, security and simplicity for people around the world to remit funds,” said Jing, “especially in major economies such as the United States, China, India, Mexico and the Philippines.”
The Green Digital Finance Alliance will be part of all this growth. The Alliance is in the process of establishing a Steering Committee to be co-chaired, at first, by its founders, and will have a secretariat to support its work. In the first instance, UN Environment, based in Nairobi, will act as the secretariat for the Alliance.
Dr. Patrick Njoroge, Governor, Central Bank of Kenya is looking forward to the challenge. “Innovations in financial technologies (fintech) offer the greatest hope for aligning the world’s financial systems with the urgent twin objectives of sustainable development and deepening financial inclusion,” he said. “Further progress requires the close cooperation of all-innovators, regulators, financial institutions.“
Featured image: A happy user of the Ant app Alipay (Photo courtesy UNEP) posted for media use
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