BANKING
When it comes to carbon emissions , we tend to think of fintechs as being a light touch . After all , they ’ re not burdened with the same physical infrastructure that traditional financial institutions have , they are more likely to be remote organisations with employees working from home , and much of their business is done either on the cloud or through APIs .
Yet fintech needs to demonstrate that it ’ s making a difference , just like other industries . There are still carbon footprints associated with the delivery of financial services , and fintechs need to show willing that they are playing their part . Consumers are paying more attention to climate issues than ever before , and consumer power is a huge incentive for businesses . support cloud computing – to support this , which in turn need electricity for power and air conditioning ,” Thompson says . “ According to Greenpeace , in 2020 Amazon ’ s data centres emitted more than 44mn tonnes CO2e . Microsoft emitted some 16mn CO2e .
“ Data centres can , of course , be powered from renewables . Greenpeace also gives the example of Google ’ s longterm objective of purchasing all electricity from renewable sources , with 2020 CO2e emissions of only 1.2mn .”
Bitcoin mining has a large carbon footprint Thompson also cites bitcoin mining as an example of the carbon footprint associated with fintech . Although bitcoin is a digital asset , and we often like to think
Where do fintech ’ s carbon emissions come from ? The main source of carbon emissions for fintechs is the energy required to operate data centres , servers and physical locations – either theirs , or those of their partners and suppliers – particularly when those facilities are powered by fossil fuels rather than renewable energy . Even renewable energy has a carbon footprint , particularly when building projects from new , although research in the journal Nature Energy has suggested that the carbon footprint of renewables is even more insignificant in the long term than we might think .
Simon Thompson is the author of Green and Sustainable Finance , a new edition of which , due out in January 2023 , includes a chapter on sustainable fintech . “ The increasing use of digital technology requires building the infrastructure – particularly the data centres required to sustainabilitymag . com 99