With a more world conscious focus and the ability to micro-invest, green banking has moved away from eco-warriors to millennials. This green banking webinar looks at how fintech has made it easier to be an ethical consumer, as well as how platforms and funds are bringing green banking into focus. As well as helping the environment and ensuring positive changes to the planet, such as planting trees or reducing pollution, green banking is now something even High Street financial institutions want to play their part in.
Moderated by The Fintech Times Editor-in-Chief Gina Clarke, the panel consists of Thanos Bismpigiannis, Head of Product at Plum Fintech, Tim Coates, Co-Founder, Chief Customer and Regulatory Officer at Oxbury Bank and lastly, Adrian Rimmer, Partner at Finsbury Glover Hering.
The webinar began with each of the panellists introducing themselves and their company. Tim introduced Oxbury Bank as the UK’s only 100% dedicated agricultural bank. They were recently authorised in 2020 by the PRA and FCA and went live in January 2021 as a dedicated bank for British farmers, with sustainability at the core of what they do. Plum is a personal finance management application, with Thanos explaining that they’re “on a mission to help customers save and grow their money by helping them understand their spending and give them the opportunity to invest.” Finally, Adrian introduced himself as a specialist in ESG and sustainable business apps, working with banking and finance organisations to build commercially sustainable offerings.
The discussion kicked off with Gina asking the panellists what ESG products they offered. Tim started by saying that at Oxbury, they have fintech at the heart of the proposition.
He said: “As a brand new bank that we’ve built from scratch ourselves, we’ve designed it in such as we can offer really bespoke products to our key target audience, which is the British farmer. That allows us to be incredibly bespoke but also incredibly data-rich – and data and the ability to verify and assure that data is a key part of ensuring we have proper ESG deliverables.
“British agriculture is in quite a unique position in terms of its role within the ESG debate and movement. We offer two core lending products – one is a loan proposition, some of which look directly at things that may relate to ESG like rural power generation or using renewables. We look at how any changing activity has an environmental angle to it as part of our data collection when we onboard the customer. The ultimate goal in the future is to link that to our own credit underwriting approach so that farm businesses that are becoming more sustainable and increasingly responsible are rewarded for doing so.”
Thanos also outlined the solutions Plum offers, stating that they have seen a huge demand in their consumer base for these offerings.
“We started offering investment proposals to consumers, having an option to have an ESG focused fund that provides investments for companies that have specific requirements. What we gradually saw was that more and more consumer will come and ask for more options still within the framework of ESG, so we launched two new investment funds.
“We did a survey last year and we saw some really strong demand on these kinds of offerings, and that’s why we started getting more targeted strategies on specific ESG frameworks and we’re looking to extend them further. More than 60% of the investors that we surveyed gave an ESG or a clean energy fund as their top two preferences, so there is a very strong demand from customers, especially those who are younger like the Gen-Z and Millenials.”
In terms of the younger generation driving much of ESG demand at the moment, Adrian agreed that the sector is seeing a really strong appetite from young people.
He said: “One of the things we’ve seen a real trend in is asset ownership, so pension fund activities in the space. Many of the advisors that are helping those pension funds understand that universe are coming from the younger generation who are very passionate about the space and are likely to be most impacted by things like climate change. They are really driving the agenda within pension funds, and that in turn is requiring them to change the mandates that they put on place for asset managers seeking new investments in this space.”
In terms of the future, Thanos told the panel that there needs to be better standards when it comes to ESG to help consumers compare investment opportunities.
“We are not yet at a place where ESG Standards or a framework is there for a consumer to look at, understand and compare,” he said. “There is no specific way for reporting in ESG, so company managers may report things differently or present things differently which makes it a very challenging process for the consumer to gather all this information and make a conscious decision of whether they want to invest.
“What I think is a positive sign is the younger generations are being raised in a period where the effects of environmental problems are more accessible through the internet – people know what’s happening and they have been more cautious around these problems and more active on how they at an individual level can solve them. To me, the knowledge is there, the access is there so it’s how do we create the standards to make this accessible in the sense that is efficiently consumed by the user.”
Finally, offering his advice to consumers wanting to explore the ESG space, Tim said: “To some extent, it’s like any form of investment advice, which is do your research. Don’t just accept what others are saying, and until the alphabet soup of standards is more transparent and easier to navigate through then it’s a bit of buyer beware.”