The World’s First Green Fintech Taxonomy

Today at the Building Bridges Summit in Geneva the Green Digital Finance Alliance and the Swiss Green Fintech network launches the world’s first green fintech taxonomy. The report entitled “A Green Fintech Taxonomy and Data Landscaping” invites feedback on the taxonomy with the aim of arriving at a final taxonomy in the first quarter of 2022. The role of the green fintech taxonomy will be to further mature and stimulate the green fintech market via enabling a harmonised approach for policy makers, investors, and market actor to assess green fintechs. The time is right for the introduction of a green fintech taxonomy, given how much the past year’s fintech market evolution has been marked by a new wave of fintech solutions with a green intent. During the first years of the fintech market, various taxonomies emerged using categories such as digital lending, digital payment solutions, and digital wealth management. These categories largely mirrored established financial products segment, just recast in digital forms. Thereafter came the second wave of fintech market development defined by using new data sets to innovate entirely new digital financial products and services such as programmable utility tokens or security token offerings. Now, the landscape has further evolved to encompass new types of commercial applications which collectively can be thought of as a third wave of fintech market development. This third wave is defined by fintech solutions designed to better align the behaviours of the financial system with green objectives—by either unlocking new and more green finance or by better aligning existing financial and capital flows with green objectives. Given this latest wave in fintech’s market evolution, an updated taxonomy is in order. This report constitutes an initial classification of green fintechs. This publication first establishes the green fintech taxonomy containing the following seven green fintech categories:

• Green digital payment and account solutions
• Green digital investment solutions
• Digital ESG-data and -analytics solutions
• Green digital crowdfunding and syndication platforms
• Green digital risk analysis and insure-tech
• Green digital deposit and lending solutions
• Green digital asset solutions

The report also maps the main databases leveraged by each category of green fintech. The database mapping offers an overview of which datasets if made accessible could drive a greater supply of green fintech innovation. Some of the opens source datasets that have enabled most green fintech innovation include open-source earth observation data from Copernicus and NOAA databases, carbon inventories and carbon accounting databases, voluntary carbon credit registries and open banking data infrastructure. In addition, are proprietary company databases managed by ESG data vendors, which are highly leveraged in combination with web-scraping by green fintechs. IoT-generated dynamic data from asset level is one of the least leveraged datasets. However, structuring IoT and data in infrastructures such as national or regional data hubs holds the potential to accelerate green fintech innovations across the taxonomy categories.