Globally, the efforts to apply technological innovation to the promotion of the development of green finance can be traced back to The Inquiry into the Design of a Sustainable Financial Systeminitiated by the United Nations Environment Programme (UNEP) in 2014. The project first studied the possibility of developing digital finance to support sustainable development. In the process of global sustainable financial development, European organizations have taken more active measures to develop green financial technology. There are relatively more green financial technology projects run by institutions in North America and Asia, and relatively few in South America, Australia and Africa. In terms of involved financial technologies, big data analysis is relatively common, while the application of AI technology in green finance still needs to be fully explored though its development was quite early. The application of blockchain and the Internet of Things is still in its infancy.
As one of the leaders in the application of global financial technology, China is also in the forefront in terms of using financial technology to promote the innovation and development of green finance. Especially after 2020, the digital transformation of financial services and the wide application of financial technology is facing great market demand, and financial technology has played a positive role in the post-pandemic economic recovery. According to the annual follow-up survey on the application of China's financial technology in the field of green finance conducted by the Beijing Institute of Green Finance and Sustainable Development, in 2020, 59 fintech companies were active in the field of green finance in China, including 41 fintech companies focusing on serving green finance and 18 technology service companies subordinate to financial institutions or financial investment groups. Most green financial technologies can be divided into three categories: green financial business, green industry applications and general technology offering, which will be discussed in turn.
Green finance business. The use of financial technology tools is mainly concentrated in business fields such as green credit, green funds, renewable energy market transactions, green bonds and so on. Among them, the utilization rate of these tools is high in the business fields of green credit and green funds, but relatively deficient in the fields of environmental equity markets, green trusts and green leasing businesses.
Applications of green industry. The use of financial technology tools covers many fields, such as ESG investment and financing, national carbon market trading, green building, green consumption, green agriculture and small and micro enterprises.
General technology offering. From the perspective of technology application, big data, artificial intelligence and cloud computing are still the three main technologies to promote the development of green finance in China. Applications of Blockchain and the Internet of things are relatively rare, but it can be predicted that they will develop rapidly in the future to realize the whole process real-time information collection. Financial technology is widely used in environmental data, ESG data and evaluation, environmental benefit calculations and risk monitoring, information sharing systems and green credit information management systems of financial institutions. The application of financial technology in the fields of green asset identification and traceability, environmental climate, financial risk quantitative assessment and credit risk management will become the next areas for development.
Published on December 2, 2021