" class="no-js "lang="en-US"> The Importance of ESG in Payments with ACI & CommUnique
Friday, April 19, 2024

Financial Services to Empower Humans: The Importance of ESG in Payments

The Fintech Forecast with ACI Worldwide

The Fintech Forecast is a series of guest articles published each month from thought leaders at ACI Worldwide

Author: Elise Thrale

Payments are as old as time, and throughout time we have evolved the way we pay for goods and services. From the first paper currency hundreds of years ago, to the first digital payment in more recent history, it is constantly evolving. It is a ubiquitous part of our lives – when making purchases, sending money or paying bills. For this reason, payments play an important role in impacting people and the planet.

The importance of ESG

Climate change and decarbonisation are becoming a priority for investors, customers and employees when measuring a company’s success. Not only do they pay attention to the company’s future vision, but also its ESG communication and goals. There is now a higher standard for businesses to be socially conscious and create a positive impact where they operate, and more incentive to commit to and to communicate social impact initiatives to all stakeholders.

This set of standards is referred to as Environmental, Social and Governance, or ESG for short. According to PwC, ESG-focused investment will soar 84% to $39.9 trillion USD by 2026, proving that companies with have good ESG initiatives are more attractive to do business with.

So, humans are constantly making payments, but how do we make payments work for humans?

Helping the world go round

To learn more about ESG for payments, I spoke with Gihan Hyde, CEO of CommUnique, who has been implementing ESG campaigns in eight sectors, including the fintech sector, and her customers have closed over £300m in investment deals.

Although most businesses in the financial services and payments space were not created for ESG reasons, we cannot deny that operations have an effect on the people and planet. Not only does easing payments between people and businesses help the world go round, but continued innovation in the industry also creates social impact.

Gihan gave some great examples of how continued innovation enabled by emerging technologies such as real-time payments are reducing the need for cash, and therefore having a positive impact on our carbon footprint, or the ‘E’ of ESG. ATMs contribute to the 11 billion receipts produced in the UK per year, in the form of non-recyclable thermal paper, begging the question that there must be a more sustainable way to document that a payment has been made and to move funds. In markets at the forefront of payments, such as India, there is a huge use case for QR code payments in the place of less carbon-friendly POS terminals. Many banks, financial institutions and merchants are taking steps towards these changes to improve user experiences, and are having a positive impact on the planet as a consequence.

What does ESG mean for your business?

Gihan emphasised the importance of avoiding greenwashing, and to admit if there is still a way to go. Focusing on the ‘S’ side of ESG, it is important to acknowledge that, by creating accessible and inclusive financial infrastructures, we are including more people in the national financial system. But, there is more to be done in making services available to the underbanked, and using our resources to broaden the availability for credit and investment opportunities.

So there is always opportunity for improvement, and no shame in denying that. There has been a seismic shift in the way we invest, and in the companies people choose to work for. According to PwC, 30% of investors say that they struggle to find attractive and adequate ESG investment opportunities. This boils down to making sure that companies are communicating ESG in the right way. Ultimately, with the right communications strategy and ESG plan in place, it leads to more deals and more investment for your company, and a healthier, happier planet.

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