On 29 November 2021, Jason Tu, CEO of MioTech was invited to attend the seminar “Proposal for the event on supporting China's 3060 goals Green Fintech” hosted by IFS, FC4S, New Energy Nexus, UK PACT and UK DIT, at British Embassy Beijing.
At the panel session, Jason, together with panelists of industry experts from HSBC, Industrial Bank and FinTech Scotland, discussed on the role of fintech in developing green finance and the market opportunities of green fintech.
Introducing MioTech's business model, Jason shared his perspective on ESG and carbon neutrality and how they can be viewed from three dimensions, which are data, technology and methodology. MioTech's value is to solve the challenges regarding data and technology.
Figure: Four Types of ESG Data
In MioTech’s universe, four types of data are required to evaluate a firm’s ESG performance, reported data, alternative data, news/social media data, and data from the engagement with firms themselves. The trade-off comes as reported data is of lower frequency than both news/social media data, and alternative data, but it is more credible, while news/social media data, being the most frequent has the most “noise”.
Different firms' disclosure data accessible on public platforms reflect divergent topics and/or materiality in the ESG evaluation framework, thus peer comparison is elusive when such overlapping is small. Jason pointed out that the active participation and inquiry of shareholders have been gradually becoming an important way to obtain ESG data. MioTech's carbon emission and energy management system provides a solid foundation for enterprises' own data management and disclosure. By obtaining upstream data, it helps financial institutions and enterprises themselves to have a more accurate understanding of an enterprise’s environmental impacts, establishing the basis of benchmark analysis and industry comparison modeling.
Another observation is that enterprise customers have accounted for a larger share of MioTech’s clientele since this year. According to Jason, before 2021, around 90% of MioTech’s clients were financial institutions, while this year, the share of enterprise customers has been rising.
A report from Green Finance Committee, China Society for Finance and Banking once noted that under the context of China's vision to reach carbon neutrality by 2060, a total investment of 487 trillion yuan would be needed in the next 30 years, which covers both the needs for fixed assets and cashflows. In addition to the immense investment opportunities, the number also implies the importance to channel funds efficiently. Financial technology, or fintech, with its innovative platforms and technologies, can connect more lenders and borrowers, as well as help investors to make science-based decisions on what to invest in to tackle climate change.