FinTech Magazine's 2024 Lookahead: ESG

As we look ahead to 2024, FinTech Magazine has gathered insight and expertise from dozens of leaders representing companies operating right across the financial services spectrum. 

In this instalment, the focus is on all things environmental, social and governance (ESG).

Adam Zoucha, Managing Director EMEA at FloQast

2024 is set to be a defining year for ESG strategies as it becomes mandatory for many organisations. It’s likely many companies will be looking for ways to define and measure their progress. Those who tell their ESG story via sound data collection, standardisation and accuracy will ensure audit-ready, error-free reporting.

Marius Galdikas, CEO at ConnectPay

ESG considerations are expected to receive increased focus in 2024, as fintechs incorporate sustainability into their business strategies. For fintechs, adhering to ESG standards can include making net-zero pledges, supporting efforts to combat climate change and transitioning away from the use of energy-intensive technologies. Such changes may be driven not just by regulatory changes, but also by increased commitment to social responsibility and increasing consumer demand for ethical and sustainable financial services. In an increasingly eco-conscious industry, the integration of ESG considerations could lead to a competitive edge for fintechs, attracting environmentally-conscious investors and fostering long-term resilience.

Anders Holm, Chief Commercial Officer at Fadata

Almost all companies today are striving to build a green image - and the insurance industry is no exception. In an era of ESG transparency and increasing sustainability awareness, sustainability will increasingly come to the fore for all insurers. Increasing regulatory requirements, such as the EU's Corporate Sustainability Reporting Directive, will add to the pressure on insurers to drive the green transformation. In 2024, the industry should begin to deliver on the promises made to date and implement sustainable measures to meet both regulatory and self-implemented goals. 

Denise Johansson, Co-founder and Co-CEO at Enfuce

One notable change on the horizon is the end of price wars. Players that have engaged in aggressive pricing strategies to secure significant logos or clients may find it challenging to sustain their operational margins and maintain shareholder expectations for profitability. As the industry matures, the focus is shifting from acquiring logos at any cost to demonstrating sustainable growth and profitability. Companies will need to strike a balance between competitive pricing and maintaining healthy margins to ensure long-term viability. Fintechs with robust unit economics, a focus on operational efficiency, and strategies for sustainable growth are likely to attract significant funding.

Steve Round, Co-founder at SaaScada

In 2024, most companies will have completed at least one annual report disclosing some key ESG indicators, such as their diversity targets, or Scope 1, 2 and 3 greenhouse gas emissions. Many of these disclosures will be impenetrable and unstandardised. To try to avoid this trap in the future, many investors and businesses will be looking to standardise their ESG reporting frameworks in 2024 – and will, in turn, look to banks and fintechs to create the platforms to facilitate this.

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