Latest news for ESG in retail banking

imagin, CaixaBank’s digital services and lifestyle platform, has ventured into the NFT universe. Specifically, imagin is rolling out the first collection of ‘tokenised’ digital illustrations that will reflect the support given to projects with a positive social impact. The goal of the initiative is to reward users who contribute to the sustainability challenge proposed by imagin. Namely, to remove 100 tonnes of plastics from the sea. 

This first collection of NFTs from imagin is titled “Clean the oceans”. This consists of illustrations inspired by marine animals that document and provide traceability for each user’s specific contribution to this sustainability challenge. It is the first European utilising blockchain that demonstrates the impact of the involvement of end users in ESG initiatives. 

The NFT contains specific information on the plastic removed from the ocean as a result of each user’s contribution. This includes details on the date the waste was collected, the port where it was offloaded, the recycling plant where it was processed and the second life given to the recycled material, which is normally used to manufacture furniture. The digital asset also includes the unique identifier that certifies its location in the blockchain. This is is then transferred to the wallet assigned to each customer. 

Every NFT also contains a unique illustration. The collection has been designed by a creative team that used advanced digital art resources, including artificial intelligence. The result is a reimagining of the deep ocean floor and the animals that live there. 

Imagin is promoting the project to highlight its credentials as a digital leader in sustainability. The project also showcases the role that blockchain technology can play in the field of sustainability. 

Imagin’s initiative was carried out in collaboration with Fireblocks, a partner that stores the private keys of the digital assets. KPMG is acting as an adviser on the project with ioBuilders generating the NFTs.

A report from Paysafe and Clifford Chance entitled ‘A green future: How the crypto asset sector can embrace ESG’ recognises that as the relationship between ESG and fintech increases, a comprehensive approach to regulation is necessary to ensure that policy initiatives are aligned and reinforce each other. 

Report takeaways include:

The financial services, payments and crypto industry face many similar challenges in relation to ESG and climate-related risks. It is key that these industries find a way to collaborate to develop and strengthen net zero commitments and responsible social and governance conduct. 

Regulatory and governmental bodies should encourage the consistent use of metrics to allow greater consistency across jurisdictions and industries. Consumers and businesses are seeking to incorporate ESG into everything they do. As such, it would be sensible for ESG metrics to support comparable rules across industry sectors and jurisdictions, aligning with global standards and support. Regulatory and governmental support here is essential. 

Investors in crypto assets should be able to easily make ESG-informed decisions from the outset of their crypto activities. 

The absence of comparable and transparent metrics in these areas create challenges. 

The report recommends that businesses operating in the metaverse embed ESG conditions and principles with an emphasis on social inclusion and responsible governance. 

The metaverse is first and foremost community driven, meaning that social inclusion and effective governance through responsible standards and oversight will be required if it is to evolve responsibly. 

Finally, the report authors encourage the UK Government to appoint a specialist ESG and Technology Minister who will be able to support the embedding of ESG in the foundations of new technologies in the UK. 

Climate tech investment plummeted in Q1 of 2023, despite it being the fourth warmest quarter ever. 

Even as January broke warm-weather records across Europe, climate tech investment fell 56% in Europe, about the same as the global decline. Virtually every segment of the sector attracted less capital, as investors pulled back from 2021-22’s record pace of investment (Global Breakdown). 

Victor Basta, CEO of DAI Magister, the climate tech focused boutique investment bank, told RBI: 

“Not only total investment, but also the number of funding rounds fell, from 384 in Europe in the same period last year to 132 during this year’s first quarter. 

“The five largest European climate tech financings closed mostly in energy generation, with Isar Aerospace’s recent round also making the list. The trend of the largest climate deals being in energy generation (especially solar) is common to both the US and EU so far in 2023, though in Q1 2022 there was greater variety, with large deals across agritech, construction technology, and sustainable mobility.” 

Basta notes that, up to this last quarter, climate tech had remained remarkably resilient, with total capital last year nearly the same as 2021’s high water mark. A new crop of climate investment funds raised fresh ‘dry powder’ during the last two years and began actively backing growth companies across the climate tech sector. These were joined by a whole crop of generalist funds targeting climate-focused companies looking to expand in a range of segments across the US and Europe. 

Basta added: “With the downturn in valuations and investment activity, it appears that investors have pulled back generally, including from promising climate tech companies. Rounds are still getting done but are certainly harder to navigate than 12-18 months ago. Moreover, they generally require more time and effort to close, even for the most promising growth companies in Europe and the US. 

“Interestingly, larger rounds in European climate tech are proving more resilient than earlier stage rounds; $40m+ financings are down only 23%, half the decline generally in Europe. The reason for this preference for larger rounds with more established companies is the lower risk appetite amongst climate investors in Europe. In short, it remains easier to raise a larger round today in Europe than a smaller one.”