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Swiss sustainable fintech map reveals booming sector – Fintech Schweiz Digital Finance News
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E.foresight, a Swiss banking think tank run by telecommunications provider Swisscom, He released its Swiss Sustainable Fintech Map, which highlights Swiss fintech companies that incorporate sustainability into their business models, operations and core products.
The map shows that Switzerland is currently home to 49 companies that fall into the sustainable fintech category, providing the segment with a 12% share of the overall fintech ecosystem. Investment management is the most developed sustainable fintech vertical in Switzerland, with 28 companies. This is followed by banking infrastructure with 15 companies, payments with four and deposits and loans with two.
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The figure implies that the Swiss sustainable fintech sector grew by 53% between 2023 and 2024, growing at a much faster pace than the fintech sector as a whole (16%) during the period. data from the IFZ Fintech 2024 study of the Institute of Financial Services Zug (IFZ) of the Lucerne University of Applied Sciences and Arts.
An analysis of the founding years of sustainable fintech companies based in Switzerland shows that around half of all sustainable fintech companies were founded in the last three years, which indicates some momentum in this sector.
From a regional perspective, the report shows that the largest cluster of sustainable fintech companies is located in the canton of Zurich (22 companies), followed by Geneva and Zug (8 each), Basel-Stadt and Schwyz (3 each), Vaud (two ) and Jura, Neuchâtel and Thurgau (one each).
Sustainable finance on the rise
Sustainable fintech companies leverage technology to advance environmental, social and governance (ESG) criteria while providing financial services. These companies are becoming increasingly important for their positive contribution to sustainable development goals such as reducing carbon footprint, promoting financial inclusion and encouraging ethical investments.
Open forest protocol, for example, is developing an open, scalable platform that allows forestry projects of any size, from around the world, to measure, report and verify their forestry data. The company, which lifted up $4.1 million in January 2023, uses blockchain technology to verify and publicly record forest data, so anyone can see what is happening with registered forests.
Eco fryer is a Zurich-based company that provides business-to-business (B2B) software for financing renewable energy projects through tokenized green loans. The platform uses artificial intelligence and distributed ledger technology (DLT) to simplify the creation of tokenized green bonds backed by sustainable infrastructure projects and improve transparency.
Additionally, Pelt8 offers a complete solution for auditable data collection, calculation and reporting of climate key performance indicators (KPIs), helping companies move away from Excel spreadsheets to save time and improve efficiency. The company was named “Early Stage Start-up of the Year” at Swiss Fintech Awards 2023.
Sustainability in the banking and finance sector has gained increasing attention in recent years, a trend that is evident among investors and in investment activities. Analysis of the IFZ show that around half of the Swiss prefer the sustainability of financial investments. Plus, a 2024 report from the Swiss Sustainable Finance organization reveals that sustainability-related investments have increased in recent years, from a volume of 717 million francs in 2018 to around 1.7 billion francs in 2023.
The topic is also very topical at a regulatory level. The new self-regulation of the Swiss Bankers Association comes into force on 1 January 2023 has entered into forceforcing banks to survey their customers’ sustainability preferences and provide customers with investment products in line with those preferences.
Switzerland’s green fintech ambitions
Swiss is recognized as the fourth largest market globally for sustainable fintech. This thriving space has grown thanks to support initiatives and promotion efforts by the government.
Key initiatives include the establishment of the Green Fintech Network, established in November 2020, and subsequent ones publication of the Green Fintech Action Plan in April 2021. The Green Fintech Network is an informal group of experts representing companies and organizations such as the Zurich University of Applied Sciences, F10 Fintech Incubator and Accelerator, PwC and Swisscom, but also startups green fintechs like MSCI Carbon Delta, representation risk and Yova. The group has been started by the State Secretariat for International Finance SIF and is part of Switzerland’s broader ambition to become a global leader in green digital finance.
In 2022 the Federal Council launched a new system that measures the environmental impact of financial investments. The Swiss Climate Scores are designed to provide institutional and private investors in Switzerland with clear and comparable information on how closely their financial investments are in line with international climate goals.
Currently, the Swiss government is working on new legislation to regulate greenwashing in the financial sector. The Federal Department of Finance said a draft law should be available for consultation by August 2024.
Featured image credit: Edited by freepik
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