Environment, Social and Governance has become one of the biggest concerns with listed company in Hong Kong in recent years. With the requirements of Carbon Neutrality 2050 in Hong Kong and Carbon Neutral 2060 in Mainland, companies are striking to enhance their ESG practices in all levels. In this article, I would like to explore the ESG opportunities with the aids of FinTech to investigate how our members can contribute the ESG system by re-defining the ABCDEFG in FinTech for ESG.
(Disclaimer: @emil 陳家豪 is the advisor in all ESG projects and Patrick Tsoi is the founder of esgtraining.org)
Re-defining the ABCDEFG in FinTech for ESG:
- A — Artificial Intelligence. AI in sentiment analysis of ESG keywords were already widely used in ESG reporting and ESG rating. Serval Hong Kong based FinTech companies and members of ACMCP.orgACMCP.orgThe Association of Cloud and Mobile Computing Professionals (ACMCP)’s research and official publications on Medium4 FollowersFollow are doing great in ESG KYC (Know Your Customers) and RegTech. (Aereve)
- B — Blockchain. Blockchain technology already used by our members in ESG Supply Chain from source of manufacturing. e.g. TT Chain is a cutting-edge data solution that promotes end-to-end transparency, traceability, and trust along the supply chain. (TT Chain)
- C — Cloud. Cloud is always the best solution in solving ESG analytics. EDNS (Ether Domain Name Services) implement Web3 and .META domain names services and next generation web hosting services (One2Cloud), where more and more ESG project are building up there.
- D — Data Lake. ESG is a big data project for every listed company specially for Data aggregation, analysis, reporting and forecasting. List companies in Hong Kong like HSBC and AIA already adopted ESG data lake solution. (ESGReport Data Lake)
- E — Ecosystem. ESG Ecosystem in Hong Kong and Mainland becomes tighten now. With the enhance of disclosure requirement of Hong Kong Monetary Authority and Hong Kong Exchange using new Green and Sustainable Finance Framework (link), ACMCP.org are linking up our members to build up the health ecosystem in Hong Kong and the Greater Bay Area.
- FG — Five-G. Five-Generation network are changing our mode of communication now. With more IoT devices equipped with 5G, ESG data and environmental monitoring can be done via the latest 5G network. (link)
ESG with the aids of FinTech is booming!
According to Patrick Tsoi, project leader of esgtraining.org, ESG with the aids of FinTech is booming in the coming years due to several policies and future action plans by Governments worldwide.
- United Nationals Sustainable Development Goals (UNSDGS)
United Nationals already setup 17 development goals in global sustainability. Almost all the listed companies worldwide are using these goals for the ESG milestones.
- China Carbon Neutrality 2060
China setup first long-term climate goal, and will require China to rein in CO2 and probably other greenhouse-gas emissions to net zero in 2060.
- Hong Kong Climate Action Plan 2050
Hong Kong’s Climate Action Plan 2030+ in 2017, setting out the decarbonisation target of reducing Hong Kong’s carbon intensity by 65 per cent to 70 per cent by 2030 using 2005 as the base, which is equivalent to a reduction in the total carbon emissions by 26 per cent to 36 per cent. With the implementation of various mitigation measures, Hong Kong is moving steadily towards the 2030 decarbonisation target.
- Raise of new reporting and disclosure frame in data-drive approach. E.g. Task Force on Climate-Related Financial Disclosures (TCFD)
Data Driven Task Force on Climate-Related Financial Disclosures (TCFD) was created in 2015 by the Financial Stability Board (FSB) to develop consistent climate-related financial risk disclosures for use by companies, banks, and investors in providing information to stakeholders.
- International Carbon markets and raise of Green Bonds
Thus, we foresee that ESG with the aids of FinTech will lead to mass opportunities in ABCDEFG applications, ESG training and Talent’s developments.
ESG FinTech Education is the key!
As a summary, I would like to point out that the most important issue in using FinTech is not the technology itself! Actually, it is the education we are going to teach our clients how to make them happen.