On June 29, ZIBS delegation visited FSFM and had a discussion with representatives from the school, related organizations and enterprises. During the event, Prof. BEN Shenglin, dean of ZIBS, delivered a keynote speech titled "Fintech Helps the Development of Sustainability and Financial Centers".
Ladies and gentlemen,
I’m so glad to stand before you today, as the Dean of Zhejiang University International Business School (ZIBS) and as one of the founding members of Sino-German Center of Finance & Economics (SGC), to address a topic of utmost importance and relevance in our rapidly evolving world: "Fintech helps the development of sustainability and financial centers."
The intersection of financial technology and sustainability has paved the way for innovative solutions that not only drive the growth of financial centers but also promote environmental stewardship. Today, I will explore how fintech empowers the sustainable development of financial centers and facilitates the transition towards green finance.
Let me start with what we all agree on: sustainability has become a pressing global concern. The world's financial centers are changing between tradition and modernity, with development and change never stopping from the United States, Europe, Singapore to China. The urgent need to address climate change, reduce carbon emissions, and promote environmental preservation has catalyzed a paradigm shift in the financial industry. Fintech has emerged as a powerful enabler in this transformation. It empowers financial centers to integrate sustainability principles into their operations and provides necessary tools and infrastructure to facilitate green finance.
One crucial aspect where fintech excels is in promoting financial inclusion in sustainable initiatives.
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Fintech solutions such as digital banking, mobile payment platforms, and crowdfunding enable individuals of all locations and socioeconomic statuses, to participate in sustainable investments. This democratization of green finance ensures that a broader segment of the population can benefit from sustainable development. By leveraging fintech, financial centers can support a more inclusive and sustainable economy.
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Furthermore, fintech plays a pivotal role in enhancing the transparency and traceability of sustainable investments. Blockchain technology, for instance, offers a secure and immutable ledger that can be used to verify the authenticity of sustainable projects and track the impact of investments. This transparency not only builds trust among investors but also ensures that funds are channeled towards projects that genuinely contribute to environmental sustainability. Financial centers that embrace fintech can position themselves as leaders in providing trustworthy and traceable green finance solutions.
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Fintech innovations have also revolutionized risk management and assessment in sustainable finance. Through advanced data analytics and machine learning algorithms, financial centers can evaluate the environmental, social, and governance (ESG) performance of businesses and investment opportunities. This enables more accurate risk assessment, allowing investors to make informed decisions about sustainable investments. By leveraging fintech, financial centers can foster a culture of responsible investing, where sustainability considerations are integrated into investment strategies.
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Moreover, fintech provides avenues for promoting renewable energy and driving the transition towards a low-carbon economy. Peer-to-peer energy trading platforms, powered by blockchain and smart contracts, enable individuals and businesses to generate, trade, and consume renewable energy. These platforms empower consumers to actively participate in the green energy market and contribute to the reduction of carbon emissions. Financial centers that harness the potential of fintech can become hubs for renewable energy financing, supporting the deployment of clean technologies and sustainable infrastructure.
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Additionally, fintech solutions facilitate the measurement and reporting of environmental impacts. With the help of innovative tools, financial institutions can evaluate and monitor the carbon footprint of their operations and portfolios. This information allows them to set targets, track progress, and report their sustainability performance. By incorporating fintech-driven environmental impact measurement into their practices, financial centers can align themselves with global sustainability goals, attract responsible investors, and strengthen their position as leaders in green finance.
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However, we must also acknowledge and address the challenges that come with fintech's role in sustainable finance. For example, cybersecurity, data privacy, and regulatory frameworks are critical concerns that must be carefully navigated. Collaborative efforts between financial institutions, governments, and technology providers are essential to establish robust security measures, protect personal data, and ensure compliance with evolving regulations. Financial centers like Frankfurt have a responsibility to lead the way in developing ethical and sustainable fintech practices that prioritize security, privacy, and regulatory compliance.
In relation to this matter, let me introduce a specific joint initiative we have undertaken with GIZ:
Commissioned by German Federal Ministry of Economic Cooperation and Development (BMZ), GIZ has implemented a project called “Mainstreaming Sustainable Finance in Response to Climate Change” in partnership with the CFA Institute.
One of the actions we have taken is the integration of sustainable finance into university curriculum. In May, we piloted sustainable finance course at ZIBS, which will continue until mid-2024. This course aims to promote the experience sharing of Zhejiang’s best practices and leadership in green finance and fintech, in close collaboration with Huzhou Financial Office. It is also expected to encourage peer-to-peer learning and exchange between China (ZIBS) and Germany (SGC).
In our joint Research Project titled “Green Fintech’s Role in Support of Sustainable Development and Financial Center Development”, we have identified the following five challenges and put forward some policy recommendations in terms of Green Finance:
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Inadequate motivation for financial institutions. For instance, in 2021, there was green credit of RMB 15 trillion, which is less than 10% of the total lending in China; Green bond RMB 300 billion, less than 0.1% of the total outstanding bond.
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The non-standard characteristics of some green finance products and services make it difficult to scale up and replicate.
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Emphasize on summarizing best practices, case studies and experience sharing to promote the scaling up & systemization of green finance.
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Promote the scientific measurement and industry standards of green finance products and services to avoid “greenwashing”.
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Cultivate the right talents through training and education.
In conclusion, ladies and gentlemen, fintech represents a powerful catalyst for the sustainable development of financial centers and the promotion of green finance. Its impact on accessibility, payment systems, data analytics, innovative financing, and collaboration cannot be overstated. Through its ability to drive financial inclusion, enhance transparency, facilitate risk management, and promote renewable energy, fintech offers transformative solutions to address our pressing environmental challenges.
In order to unleash the full potential of fintech in the development of green finance, we must also confront and overcome various challenges, ranging from data protection to regulatory innovation. Public-private partnerships and international collaboration are crucial. That is the purpose of this seminar today, and that is why our delegation is visiting Europe: to learn, to share, and to cooperate.
"Knowing is not enough,we must apply. Willing is not enough,we must act."
We look forward to a closer partnership with all of you in this very exciting and important area: to promote ESG, green finance and sustainability. Thank you!
——Johann Wolfgang von Goethe
BEN Shenglin
Dean of ZIBS
Dr. BEN Shenglin, Professor & Dean of ZIBS, Dean of AIF (Academy of Internet Finance), Zhejiang University and President of FIRST (Beijing Frontier Institute of Regulation and Supervision Technology). He is the founder and Director of International Monetary Institute, Renmin University, and also the founder and chairman of Zhejiang Association of FinTech, the industry association of global fintech hub - Zhejiang Province. His research interests include Global Financial System, Global Banking, Management of Financial Institutions, FinTech, Entrepreneurial Finance, and International Business.
