You’d be forgiven for feeling as though the climate conversation has taken a disappointing turn lately, with UK Prime Minister, Rishi Sunak’s, recent apparent U-turn on commitments. However, there are still important strides being made in the fight for a sustainable future. In the world I operate most – fintech – I’ve been closely watching the emergence of climate fintechs: businesses offering some form of climate-based risk or accounting software, like carbon offsetting, ESG reporting and carbon accounting. In fact, climate fintechs have raised €144m in 2023, with the UK leading the way and defying the funding drought.
With COP28 coming up in just a couple of months, attention is already being placed on the topic of carbon credits and accounting. It therefore feels an important moment for climate fintechs to be thinking about how they effectively and authentically communicate their purpose to key audiences so not to get lost in negativity.
Reputational Challenges
Many climate fintechs risk running into trouble when communicating their purpose if they cannot convey the genuinely positive impact they have on the environment. This reduces trust and places companies under deep scrutiny – which can often be well deserved.
The cards can be stacked against them in some senses. For example, some companies, such as carbon credit fintechs, operate within markets that are void of strong and clear regulation. There are very limited, watertight ways to prove that carbon credits genuinely offset the emissions produced by their buyer and so they are often dismissed as fast and simple ‘cover-ups’ for unsustainable activity. Some also work in the climate crypto space. With crypto being historically known for its carbon-intensive mining process (Bitcoin alone produces between 22 and 22.9 million metric tonnes of CO2 emissions annually), this can cast a shadow of doubt on the broader climate fintech sector.
Overcoming Hurdles
However, there is a reason that VCs have been going against their recent conservatism and investing. As such, it’s time for these emerging fintechs to translate the messaging that helped them secure financial backing into solid communications that defy any potential doubt from sceptical audiences. So how can climate fintechs ensure they communicate with the most impact?
- Be authentic. It’s important to communicate in your company’s tone of voice, reflecting your brand and its ambitions, rather than using corporate jargon. Corporate speak can easily see your brand grouped in with companies that use language to deliberately cause confusion and cover up unethical activity, a practice that has tainted the industry.
- Amplify your data. Talking is one thing, acting is another. So, show how you’ve made a positive impact on the planet with concrete, data-backed evidence that can’t be argued with.
- Exhibit attainable goals. Being able to show step-by-step progress made towards the climate goal that your company is setting out to achieve, and outlining clear next steps, demonstrates that you’ve carefully mapped and considered how you’re going to reach the end goal, boosting trust in your brand.
All in all, climate fintechs are well placed to grow in importance. However, a strong, authentic and data-led communications strategy is absolutely necessary to retain emerging, yet strong, reputations and hold market positions.
Angus Guironnet, Account Manager, Technology
Our Fintech team regularly works alongside our Climate & Sustainability Unit, who are experts in developing integrated approaches to sustainability communications to tackle the unique communications challenges facing the industry. If you’d like to hear more, contact [email protected].
