Embedded Climate Metrics in Financial Apps

Banks, NBFCs have been working on things like personalization, omnichannel experiences for several years now. What's changing is the depth and sophistication of these implementations. However, let me highlight a few areas that are emerging or gaining significant new traction in 2024: • Climate fintech: Banks are increasingly interested in tools that can help them assess and manage climate-related financial risks in their portfolios. In India, there's growing awareness and interest in this area, but adoption is still in early stages compared to some Western markets. • Regulatory push: The Reserve Bank of India (RBI) has been emphasizing the importance of climate risk management. In July 2023, the RBI issued a discussion paper on climate risk and sustainable finance, indicating increased focus on this area. The URL where more information can be found is https://lnkd.in/gPRSPdmM • Green finance initiatives: Some larger Indian banks have started offering green bonds and sustainable financing products. However, sophisticated climate risk assessment tools are not yet widely adopted. Illustrative Climate Fintech User Journey: EcoInvest with GreenBank India << User: Priya Sharma>> - Age: 32 - Occupation: Software Engineer - Location: Bangalore, India Journey: 1. App Download and Registration - Priya downloads GreenBank India's mobile app and completes eKYC. - She links her existing bank account for easy transfers. 2. Sustainability Assessment - Priya takes a quick quiz about her lifestyle and financial goals. - The app calculates her current carbon footprint: 4.2 tons CO2e/year. 3. Personalized Dashboard - Priya sees her sustainability score: 65/100 - The app suggests ways to improve her score and reduce her carbon footprint. 4. Green Investment Options - Priya explores curated green mutual funds and bonds. - She invests ₹50,000 in a solar energy fund with a projected 12% annual return. 5. Carbon Offset Integration - For every ₹10,000 invested, GreenBank plants a tree. - Priya's investment results in 5 trees planted, offsetting 0.1 tons CO2e/year. 6. Sustainable Spending Insights - The app analyzes Priya's spending patterns, highlighting high-carbon activities. - It suggests switching to a green electricity provider, potentially reducing her footprint by 0.5 tons CO2e/year. 7. Progress Tracking - After 6 months, Priya's dashboard shows: - Sustainability score improved to 72/100 - Carbon footprint reduced to 3.8 tons CO2e/year - Green investment value: ₹53,000 (+6% growth) 8. Community Engagement - Priya joins GreenBank's eco-community, participating in local clean-up events. - She earns "green points" for her participation, unlocking preferential rates. The climate fintech example shows how traditional banking can integrate sustainability features. #climatechange

Finance leaders, are you feeling the pressure to manage both financial performance and sustainability? You’re not alone—CFOs everywhere are now expected to integrate ESG data seamlessly into their strategies. But how can finance leaders achieve this without adding complexity? That’s where AI-powered finance automation comes in. The new CFO mandate: Finance and sustainability integration ➡️ ESG reporting, carbon tracking, and sustainability impact are no longer optional—they are critical financial responsibilities. ➡️ Organisations must integrate both financial and non-financial metrics into a Single Truth, delivering so-called sustainability integrity metrics (like Emissions/Revenue) to make strategic decisions with confidence. ➡️ CFOs who fail to embrace this shift risk falling behind as sustainability regulations become more stringent. How AI is transforming ESG compliance and financial reporting ➡️ Real-time ESG tracking: AI synchronises sustainability data (carbon emissions, energy consumption, water usage) with financial performance metrics. ➡️Automated compliance: AI-driven tools help organisations align with evolving ESG regulations, reducing compliance risks and ensuring accurate, auditable reports. ➡️Predictive ESG insights: Intelligent automation moves ESG reporting from reactive to proactive, helping CFOs forecast sustainability trends and mitigate risks before they escalate. The Power of a unified financial and environmental truth ➡️ Break down silos by connecting finance and sustainability teams with a single source of truth. ➡️ Enable intelligent decision-making by embedding ESG factors into your corporate strategy. ➡️ Balance profitability with sustainability, ensuring that growth doesn’t come at the cost of compliance or reputation. Why this matters now ➡️ Regulators are tightening ESG compliance frameworks—companies that are unprepared will face penalties, reputational damage, or even investor scrutiny. ➡️ Consumers and stakeholders demand transparency—AI provides the tools to back up sustainability claims with real data. ➡️ Businesses that effectively integrate ESG data will strengthen their corporate sustainability strategy, enhancing resilience and long-term value. The future of finance isn’t just digital—it’s intelligent, integrated, and sustainable. CFOs who embrace AI-driven ESG tracking will be the ones leading both financial success and corporate responsibility. Is your finance team tackling this challenge, or are you still figuring it out? Let’s share insights in the comments! 👇 #SustainableFinance #ESG #FinanceTransformation #AIinFinance #CorporateResponsibility #DigitalFinance

Financial Value of Climate Risks and Opportunities 🌍 Companies are under increasing pressure to reflect climate risks and opportunities in financial decision making. This is essential for embedding sustainability into strategy and unlocking measurable business value. ERM highlights that financial valuation of environmental and social factors enables companies to align investment decisions with long term performance. Value is created through energy efficiency, circular models, responsible sourcing, and workforce inclusion. These actions contribute to resilience, innovation, and cost efficiency. Sustainable products are experiencing significantly higher growth rates than conventional alternatives. Efficiency measures can reduce operating costs by up to 30 percent, while green finance instruments can lower the cost of capital. These gains can be captured directly in financial models and forecasts. At the same time, climate related risks are increasing in scale and frequency. Physical risks already account for over 270 billion dollars in annual damages. Transition risks may result in stranded assets worth hundreds of billions. The broader economic cost of unmitigated climate change could reduce global GDP by up to 18 percent by mid century. ERM presents two complementary approaches. Value creation focuses on capturing upside through efficiency, innovation, and market expansion. Risk mitigation addresses downside exposure by incorporating climate risks into business planning and decision processes. Both require integration of ESG into financial structures. This means applying standard financial tools such as internal rate of return and discounted cash flow to evaluate climate related actions. It also involves including environmental risks in sensitivity testing, pricing models, and capital planning frameworks. Translating these impacts into financial terms enables clearer comparison and stronger governance. Capital markets are moving toward companies that manage climate exposure effectively. Lower financing costs, stronger investor confidence, and increased access to sustainability linked capital are all benefits of a robust ESG integration strategy. Quantifying the financial value of climate related risks and opportunities enables companies to move from qualitative ambition to strategic execution. Those that lead in this area are better prepared to compete, attract capital, and deliver long term results. Source: ERM #sustainability #sustainable #esg #business