Fintech and its imact on Sustainability.pptx

Use of Fintech apps and sustainability

1. sustainable finance By Nilotpal Sarma

2. FinTech Transformations in ESG and Sustainable Finance Enhancing ESG Transparency and Reporting Blockchain: ensures tamper-proof ESG records. Example:  ClimateTrade  and Ripple use blockchain for carbon credit traceability. Smart Contracts automate ESG compliance. AI and NLP: detect greenwashing by analyzing news and corporate texts. IoT sensors: collect real-time environmental data (carbon emissions, water usage)

3. Improving Financial Inclusion Mobile banking: expands access; e.g., M-Pesa supports small-scale sustainable farming. Crowdfunding/P2P lending: connects investors to green projects (Trine, Mosaic). Tokenization: fractional ownership of assets via blockchain (e.g.,  WePower  tokenized renewable energy production).

4. Innovations in Green Finance & Carbon Markets Blockchain carbon trading prevents double-counting and increases market trust. DeFi platforms (e.g.,  SolarCoin ) reward renewable energy production with digital tokens. AI automation streamlines green bond issuance and compliance.

5. Challenges and Risks of FinTech in Sustainable Finance Regulatory Fragmentation Lack of a global ESG standard (EU SFDR, US SEC, China’s framework). Legal ambiguity around smart contracts, DeFi, and cross-border data. Cybersecurity & Data Privacy Smart contract and DeFi hacks highlight digital vulnerabilities. AI bias and data misuse risk misrepresenting ESG performance. Compliance issues under GDPR (EU) and CCPA (California).

6. Financial Inclusion Gaps Poor internet/digital literacy limits rural participation. Blockchain fees and minimum capital exclude small investors. Persistent Greenwashing AI models can be gamed; blockchain tokens may be misused for fake ESG assets. Solution: Third-party auditing and smart contract verification.

7. Environmental Cost of FinTech Proof-of-Work (PoW) blockchains consume massive energy. AI data centers increase carbon emissions. Transition to Proof-of-Stake (PoS) and renewable-powered systems needed.