Launch of the City of London and FCA sustainability digital sandbox cohort at COP26
Speech by Adam Jackson, Innovate Finance’s Director of Policy
As a member of the advisory panel that assessed all the applications, I can honestly say it was a really strong field. I expect to see great things from everyone who applied, not just those projects that have joined the sandbox.
At Innovate Finance we recently published a white paper on the role of Fintech in Net Zero – which makes a bold claim that Fintech and Regtech will be at the heart of tackling climate change. I had a real thrill in assessing the sandbox applications and seeing example after example that brought this to life.
I also have a huge sense of excitement that comes from my own ESG journey. 12 years ago I led Tesco’s inaugural climate change programme, putting carbon labels on products. It took a team of consultants months to map the carbon footprint of each individual product – a carton of fruit juice or a box of washing powder. Today people like Connect, one of the sustainability cohort, can do all of this instantly.
5 years ago I worked on a report on impact investing which envisaged a world where people could take control of the environmental and social impact of their pension investments. This involved imagining an app that didn’t yet exist. Something that some of today’s cohort – like Vested Impact – are now bringing to market.
Whether or not governments from around the world can agree targets and plans to keep 1.5 degrees alive this week, net zero can and will be achieved through finance.
We will achieve net zero as capital moves away from climate risk and toward the greater asset value of net zero solutions, consumers take action, and financial regulation in key capital markets drives change through global portfolios and supply chains.
The enabler of all of this will be financial technology and innovation. Above all data and artificial intelligence to unlock solutions; digital interfaces for easy adoption; and technologies like blockchain – which for example QPQ and RISC Vision is testing in the sandbox for ESG assurance; and technologies like satellite imaging - which Telespazio and 4earthIntelligence – are using for real time assessment of supply chains and investments.
The first phase of net zero finance has focused on measuring and reporting emissions. The next phase, as clearly set out by the Chancellor this week, is about net zero action and reconfiguring financial markets.
The sandbox is an opportunity not only to develop new products – but also to explore what else is needed to achieve and accelerate this global financial rewiring. What additional data sets do we need and how can we open those up? How do we stimulate market adoption of solutions? And what regulatory approaches need to change to enable these?
So I am also excited about all the learning that will come out of the sandbox.
Projects like this will provide the climate solutions we all need, connecting with consumer demand, and creating future economic growth. So I would urge everyone – government, regulators, investors, financial institutions and corporates to follow this sandbox cohort.
Fintech can save the planet!