Unveiling the hierarchy of climate technology funding: Focus on Climate Finance Technology - Part 3
Fintech and Climate Investing: A Growing Alliance
The intersection of fintech and climate investing is a burgeoning field, with both sectors coming together to address the pressing issue of climate change. This alliance is part of a broader fintech evolution, where sustainability and environmental responsibility have become key areas for innovation.
The roots of fintech can be traced back to the mid-20th century with manual banking systems. The evolution of fintech accelerated through telephone and branchless banking in the 1980s and 1990s, and was further propelled by the digital revolution sparked by the dot-com era in the late 1990s and early 2000s. This digital revolution introduced online trading platforms, digital payments, and mobile payment solutions, revolutionizing the financial industry [1][2].
Since the 2008 financial crisis, fintech has accelerated significantly, with recent trends in AI, blockchain, and open banking APIs reshaping finance globally and expanding the industry's market toward an estimated $1.5 trillion by 2030 [3][4].
In the realm of climate investing, fintech now integrates advanced data analytics, AI, and digital platforms to support green finance. This enables investors to better assess environmental impact, manage risks related to climate change, and channel capital towards sustainable projects [4]. This integration creates a high demand for climate-related data, such as carbon emissions, climate risks, and ESG metrics, which fintech platforms process and deliver to investors efficiently.
Examples of climate fintech nominees and innovators include companies specializing in sustainable investing platforms, carbon tracking tools, and green bonds marketplaces. While the search results do not list specific nominees, some notable types in the climate fintech sector involve:
- Platforms offering climate-related investment products using AI for portfolio optimization.
- Blockchain-based solutions for transparent carbon credit trading.
- Fintech-powered ESG data providers enabling real-time environmental impact measurement.
Some examples mentioned in the broader fintech innovation context (though not all strictly climate fintech) include firms pushing AI-driven wealth management and digital asset tokenization [4].
One such climate fintech innovator is BeZero Carbon, a company that employs over 180 people and has rated more than 500 global carbon credit projects. BeZero Carbon recently raised $32m in a series C round, with new investors joining the cap table. The company provides an eight-point rating for carbon credits to investors, and boasts a customer base spread across 30 countries, with more than 100 corporate subscribers to their platform globally [5]. Their ratings are available on more than 40 platforms, including the Bloomberg Terminal.
Another example is Iceberg Data Lab, a firm that secures funding from venture capitalists like Ternel, AXA Investment Managers, and Beringea. Iceberg Data Lab offers a range of products that answer various investor data demands related to climate, carbon footprint, climate risk, and biodiversity impact. The company secured a $10m Series A in 2024, led by Beringea, a transatlantic venture capital firm. In total, Iceberg Data Lab has raised over $15m thus far, and their platform is utilized by over 60 major financial institutions worldwide [6].
The growing demand by investors for new forms of climate-related information and intelligence is driving the growth of climate fintech. As the UK government launches a consultation on the future of carbon markets, it is clear that the opportunities for climate markets in the coming years are significant [7]. This is reflected in the recent investments in climate fintech companies like BeZero Carbon and Iceberg Data Lab, which are at the forefront of this exciting and necessary evolution in the financial industry.
References: [1] History of Fintech: https://www.investopedia.com/terms/h/history-of-fintech.asp [2] The Evolution of Fintech: https://www.forbes.com/sites/forbestechcouncil/2018/02/20/the-evolution-of-fintech/?sh=71e3775a614a [3] The Future of Fintech: https://www.mckinsey.com/industries/financial-services/our-insights/the-future-of-fintech [4] Climate Fintech: https://www.fintechmagazine.com/fintech/climate-fintech [5] BeZero Carbon: https://www.bizjournals.com/boston/news/2021/12/07/boston-based-bezero-carbon-raises-32m-in-series-c.html [6] Iceberg Data Lab: https://www.icebergdatalab.com/ [7] UK Carbon Markets: https://www.gov.uk/government/consultations/carbon-pricing-mechanisms-for-the-uk-emissions-trading-scheme-post-2021/carbon-pricing-mechanisms-for-the-uk-emissions-trading-scheme-post-2021-consultation
- In the realm of environmental science, the fusion of fintech and climate investing is utilizing advanced data analytics, AI, and digital platforms to support sustainable projects and manage risks related to climate change.
- Investors in the business sector may be utilizing fintech platforms to obtain climate-related data, such as carbon emissions, climate risks, and ESG metrics, to channel capital towards environmentally responsible projects.
- The financial industry is expected to expand its market toward an estimated $1.5 trillion by 2030, with recent trends in AI, blockchain, and open banking APIs reshaping finance. This includes fintech companies specializing in sustainable investing platforms, carbon tracking tools, and green bonds marketplaces.
