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Are we witnessing the green shoots of a Swiss fintech sub-sector?

Matthew Allen

When it comes to greening up the Swiss financial sector, fintech can also play a role. But start-ups need cash. So it’s been suggested that the government part-finance a proposed fund to boost innovation and encourage pension funds and venture capitalists to invest in more green technology.

The Swiss “Greentech” sector is still in its infancy. Companies such as Carbon Delta, RepRisk, covalence and Impaakt employ machine learning and artificial intelligence to provide companies with better data on which to base their investment decisions.

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Fintech: from cryptocurrencies to neo-banks

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The sustainable robo-advisor Yova, 3rd Eyes, Greenmatch, Blueyellow and Pexapark and other notable examples of Swiss fintechs in this field.

The Green Fintech Network, a group of financial associations, companies, venture capitalists and academics, was set up last year under the auspices of the State Secretariat for International Finance (SIF). Its task is to further the advancement of financial start-ups that focus on environmental, social and governance (ESG) goals. It follows on from a government initiative to boost Switzerland’s credentials as a global hub for sustainable finance.

Green Fintech Network recently issued its first report – a non-binding wish list of measures it believes will turn the Swiss Greentech sector into a world beater. Some of the 16 recommendations are fairly standard – such as introducing sustainable finance courses at universities, linking up with international players and leveraging the expertise of government innovation agencies.

Tightening up disclosure and reporting standards related to sustainable goals has also been identified as a must.

A couple of other suggestions, however, really catch the eye. The report calls for a fund of funds to invest in Swiss venture capital that in turn invests in green fintech. Furthermore, says the “Vision 2030” report, the Swiss government could play a financing role by issuing green technology bonds. The idea is partly inspired by German government “Future Fund” and the European Investment Fund.

The idea of stimulating green fintech innovation is taken further with proposals to reduce hurdles that currently limit the degree to which venture capital and pension funds can invest in the sector in Switzerland.

And it must come as no surprise that the expert group sees Open Finance and Blockchain as two other ingredients that can be thrown into the mix to boost grassroots greentech innovation in Switzerland.

“Harnessing [digital finance’s] extraordinary potential for the greening of financial markets is critical, urgent and full of opportunities,” they say.

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