GDFA launches first ever green fintech taxonomy

The aim of the taxonomy is to develop and stimulate the green fintech market by enabling a harmonised approach for policy makers, investors, and market actor to assess green fintechs.
The report starts by providing a classification of green fintechs. These are:

1. Green digital payment and account solutions;
2. Green digital investment solutions;
3. Digital ESG-data and -analytics solutions;
4. Green digital crowdfunding and syndication platforms;
5. Green digital risk analysis and insure-tech;
6. Green digital deposit and lending solutions; and
7. Green digital asset solutions.

The report then maps the main databases leveraged by each category of green fintech - providing an overview of which datasets (if made accessible) could drive a greater supply of green fintech innovation. Open-source datasets that have enabled the most fintech innovation in this area 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. There are also proprietary company databases managed by ESG data vendors.

Structuring Internet of Things (IoT) and data in infrastructures - such as national or regional data hubs - has potential to accelerate green fintech innovations across the taxonomy categories, adds the report.

With the landscape having evolved to encompass new types of commercial applications, we are now entering the third wave of fintech market development. Defined by fintech solutions that seek to better align behaviours of the financial system with green objectives, this wave will be guided by taxonomies like the GDFA’s.

The Green Digital Finance Alliance and the Swiss Green Fintech network report are inviting feedback on their report, with the aim of arriving at a final taxonomy in the first quarter of 2022.