The UK Financial Conduct Authority (FCA) recently announced the launch of the Green FinTech Challenge. The challenge seeks to provide support to firms developing environmentally-friendly and sustainable financial technology.
The FCA recognises climate change as a “potentially irreversible threat to the planet”. With the impact of climate change on financial markets uncertain, and in accordance with their strategic objective of ensuring that financial markets work well, the FCA has stated that they are aiming for a financial services market which responds effectively to the challenges of climate change and assist in the UK’s transition to a greener economy. The challenge is open to start-ups, incumbents and technology providers. The deadline for applications is 11 January 2019.
In addition to managing climate-related risks and measuring future environmental impacts, the ideas supported by this challenge could help to channel more funds towards developing and distributing green products and services.
Speaking at the FCA’s Innovating for a Greener Great Britain event on 19 October, Christopher Woolard, executive director of strategy and competition, announced that there had been “a huge growth in the demand for green financial services products”. Recent statistics show that there are over 70 green bonds listed on the London Stock Exchange in seven currencies, worth over US $22 billion.
Further research on financial decision-making amongst Millennials and Generation Z indicates that this demand is likely to increase.
In addition to boosting innovation in specialist green products, they are currently seeking views on whether to introduce a new requirement for financial services firms to be open to the public on their management of climate risks concerning their customers and operations.
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