THE GROWTH of financial technology (fintech) companies could be driven by environmental, social and governance (ESG) investments, a study by consumer finance company Digido showed.
“More investors and consumers are becoming aware and interested in such investments, which are not only profitable, but also considered social and environmentally responsible,” Digido said in an analysis on Tuesday.
The Philippines’ sustainable technology (sustech) sector is likewise expected to grow steadily to track the trend in other Southeast Asian (SEA) countries, it said.
“The share of Philippine sustech companies in SEA will maintain its pace for the foreseeable future, landing between 10 to 11%,” Digido said.
As of 2022, the 216 sustech companies in the Philippines accounted for 10.1% of firms in Southeast Asia.
The identification of sustech companies for the analysis was based on the Tracxn global database of companies.
Companies included in the study were from sectors related to the green agenda and sustainable development, namely: green funds; sustainable e-commerce; agritech; green transport; green energy; eco manufacturing; air, water and waste pollution management; sustainable finance; circular economy; human resources; and green buildings.
Companies that integrate ESG into their operations will likely get more support from investors if they promote sustainable investments, Digido said.
Firms should develop recommendations for integrating ESG into the investment decision-making process, it said.
“Moreover, they can play an important and tangible role in the sustainable development of the economy and the fight against climate change, as they expand their influence beyond business interests,” Digido added.
There is room for more sustainable investments in the Philippines, with only $4 million invested in 169 sustech companies from 2014 to 2022, it said, which is very small compared with the $8 billion in funds poured into the fintech microfinance sector globally during the period.
“The global sustech industry, characterized to have a key role in achieving ESG goals, has so far attracted about $400 billion in investments, with main growth occurring from 2014 to 2022, according to Tracxn,” Digido added. — AMCS
