finance

The latest Green Transition Scoreboard® (GTS) found that private green investments now total more than $8.1 trillion USD ($8,133,456,730,370).

Published annually since 2009 by Ethical Markets, the GTS is a global measure of private green investment in five green sectors: 1) Renewable Energy, 2) Efficiency, 3) Life Systems (water, waste, recycling, community investing, e-learning and fintech), 4) Green Construction, and 5) Green Corporate R&D. Government investments have been omitted wherever possible and technological criteria are strictly applied.

Sector Amount US $


Renewable Energy – $3,427,534,992,202

Energy Efficiency – $1,748,904,490,919

Life Systems – $1,660,880,346,366

Green Construction – $914,736,379,757

Corporate Green R&D – $381,400,521,125

Grand Total – $8,133,456,730,370***

The aggregated total is tracked by Ethical Markets Media Certified B Corporation’s team of experts and global advisory board, led by CEO Dr. Hazel Henderson, futurist/author and former US government science policy advisor.

Henderson said “The green economy is growing faster than anyone realizes. We knew that this good news on the progress of the global green transition couldn’t be fully covered by mainstream financial media and news programs whose advertising is still from fossilized sectors.”

GTS co-author Tim Nash, The Sustainable Economist, adds “Although the USA is expected to fall behind due to federal policies that put obsolete industries like coal ahead of thriving green sectors, large corporations are stepping up to invest billions in more efficient technologies.”

The full 2017 GTS report titled “Deepening Green Finance” can be downloaded free here: 2017 Green Transition Scoreboard Cities and states worldwide are now leading, energized by former New York City mayor Michael Bloomberg and many others. The UNEP Inquiry on Design of a Sustainable Financial System is successfully engaging conventional financial markets. Co-director Dr. Simon Zadek welcomed the release of the GTS report, “With a changed political landscape, the case for green finance has to be strengthened, so your work is very important and has to be widely used”.

The GTS report traces private money shifting from incumbent fossilized sectors to emerging green opportunities. Financial firms are being forced to innovate as pressure grows from all sides.

Activist ethical investors and divestment campaigns are getting louder. New pressure from above is driven by the National Development Commitments (NDCs) signed by 194 governments under the UN COP 21 and 22 climate accords and Sustainable Development Goals (SDGs). Pressure is also coming from below with the rise of Silicon Valley’s Fintech100, including crowdfunding, peer-to-peer lending, and reward currencies.

Horyou is the Social Network for Social Good, which connects, supports and promotes social initiatives, entrepreneurs, and citizens who help the implementation of the Sustainable Development Goals to build a more harmonious and inclusive world. Horyou is also the host of SIGEF, the Social Innovation and Global Ethics Forum, taking place in Astana, Kazakhstan during the EXPO 2017, from 5-7 September. We invite you to Be the Change, Be Horyou!

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It might seem exaggerated, but fintech is going through challenging times. Since 2014, it has been pointed as an alternative for the increasingly regulated traditional financial markets and presented successful funding cases – at least, up to now. According to the research firm CB Insights, the investments on venture capital-backed fintech cooled off in the last quarter of 2015, despite reaching the best year in its history.

Besides, fintech might not be as “disruptive” as it wants to be. In a recent article published by The Financial Times, the venture capital executive Mark Tluszcz wrote about how “there has been very little innovation and nothing truly transformational” in fintech. According to him, most of their “hype” is not justified – they are just regular businesses.

What does innovation and transformation stand for, after all? Is it about processes, business models, solutions? For sure. But it is also about mission, values, culture, purposes. We can’t change the first ones without changing the latters, and this is why most fintech are being challenged right now. They are indeed presenting new market solutions and, at least technically, differentiating themselves, but with the same old thinking – profit for few and capital concentration.

The problem is “the same old thinking” – it doesn’t make sense for many actors in our globalized, sharing, collaborative society. It doesn’t sound interesting for the new generations, future clients and investors of this industry. We all like innovation, but we don’t want to use it for feeding the same vicious circle that created such global problems as poverty and inequality.

It is shameful that we, as an ever growing technological society, have 2,8 billion people living with less than 2 dollars a day. What is fintech doing to change this scenario?

A win-win situation

Last February, Horyou, the social network for social good, created the first global social currency, Spotlight. It is a fintech project, although Horyou is not a fintech company. Spotlight is a micro-funding tool that allows any member of the network to support social initiatives and non-profit organizations through a real digital currency. It also allows any member of the platform to get funds for their own projects and initiatives. And it opens a world of opportunities for investors thanks to its conscious capitalism background.

The innovation with Spotlight is it provides an alternative source of funding for hundreds of millions of entrepreneurs, youth, artists or organizations. It spreads innovation globally and it gives power and initiative to all its actors. “Spotlights is a revolution of internet which affects not only the Corporate Social Responsibility sector but the whole society on a global level”, says Yonathan Parienti, founder and CEO of Horyou.

There is hope. And that’s why I wish a long, long life for fintech, as it discovers the path that combines innovation, transformation and purpose for a better world.

Eric Lonergan first grabbed my attention when I came across an interview with him in an Irish Sunday newspaper. As somebody who also read philosophy and political economy at University, I’m always intrigued as to how I often look at economic issues through a completely different lens than some of my contemporaries who have studied pure finance or mathematics. Horyou, although not solely profit seeking, is an enterprise like any other with respect to having financial costs, so it is keenly aware that money, whether used for social or personal interest, is a tool of mobilization. In the interview I read, I learned that Eric Lonergan has just written a book on the philosophy of money and society’s relationship with it it. And I found myself nodding along with much of Eric’s hypotheses, so I was delighted when he agreed to sit down for a chat.

Eric Lonergan
Eric Lonergan

1) You did your undergraduate degree in philosophy, politics and economics at Oxford and your masters in economics and philosophy at the London School of Economics. Subsequently, working as a hedge fund manager, do you find yourself reading certain situations or analyzing things differently to your colleagues who might have studied pure finance?

One of the challenges with education in areas like economics and finance is that you have to learn the conventional wisdom before you can identify what’s wrong with it. So I spent a lot of my time studying mainstream economics and finance – much of which has some insight. Even advocates of ‘efficient markets’ like Eugene Fama, have useful observations. That said, the most useful studying I have done, ironically, was philosophy. I learned that virtually all theories are flawed, as is a lot of ‘expert opinion’.  Financial markets are similarly unforgiving. Pure finance typically ignores the most important aspect of markets – human behavior and psychology.  

2) In your recent, highly acclaimed book ‘Money’, you make the point that money as a function should be looked at as a tool to live rather than an ability to accumulate. Was this view formed from your academic study or from seeing money at work in the real world?

Part of the reason I wrote ‘Money’ was to broaden our understanding of money and finance. One of the intellectually fascinating aspects of money is that it underpins human progress, but it is also a source of many problems. I tried to explore this theme more broadly. Finance connects us all at a real human level – pensions are inter-generational transfers, mortgage lending connects depositors and young households etc. And at the other extreme, millions of people are inter-connected through global financial markets. I have seen both sides at work in the real world. At a positive level, global investors can try and set high standards for global governance, encourage long-term thinking in policy-making, and finance international trade and the exchange of technology and ideas. These are all positive forces. The other side of this interdependence is that you can have destructive financial panics – which I witnessed first-hand in the late 1990s, during the Asian crisis, and again in 2008. The challenge for policy-makers is to harness the benefits of trade and finance and mitigate these risks – which primarily means developing policies to prevent or shorten recessions.  

3) There are hundreds of stories of people leaving finance post crises, when the greed of the system was exposed, including Horyou’s own CEO who held director positions at JP Morgan and Bank of China. As someone who still works in the industry, have you seen a definite culture shift/change in priorities? How does conversation within the industry compare to pre-financial crisis?

I do think there has been a cultural shift, encouraged also by a major shift in the regulatory environment, which should be welcomed by the industry. But it would be naive to think that an industry mainly focused on making money will foster a culture of generous, socially-minded, individuals! The main challenge for the regulators, who have a difficult task, is to ensure that the incentives of participants in the industry are aligned with doing the right thing, and ultimately the interests of broader society. 

Money: The Art of Living
Money: The Art of Living

4) Horyou have just launched their global social currency “Spotlight”, which matches investors to social enterprises they want to support. We see that there is a huge appetite for impact investing, green finance etc. What are your views on these areas? Will environmental/social returns ever override profits for investors or as consumers become more discerning and regulations tighten, do you think they even have a choice to ignore more sustainable investment patterns?

My thinking on this has been heavily influenced by knowing and working with Nigel Kershaw from the Big Issue, and one of the UK’s leading social entrepreneurs and thinkers. I think social enterprises will grow in importance. In contrast to many charities, which have to devote considerable resources to fund-raising, social enterprises can be self-sufficient. And they can have an economic advantage – there is little doubt, I think, that consumers will continue to be more discerning in considering the broader effects of their actions and those of the enterprises they interact with.

5) What are the main areas you are seeing investment opportunity in, in the short term?

I try always to think in terms of the ‘long term’ – there is a lot of distracting noise in the short-term. I think one of the most interesting aspects of public markets currently – a huge fad – is what I call ‘volatility aversion’. Investor obsession with recent historic volatility as a measure of risk is causing huge anomalies in pricing. The most straightforward manifestation of this is the equity risk premium – the difference in implied returns from equities compared with government bonds. Global equities are currently priced to deliver far superior returns to government bonds over the next five to 10 years.

6) Finally, Horyou support people making impact on society for good. What impact or contribution do you want to be remembered for/still want to achieve? 

I’m too much of a philosopher to want to be remembered for anything – I’m not sure that’s a helpful ambition! I would be very happy if I could contribute to the development of policies that shorten the duration of recessions.

Eric Longeran has an interesting way of looking at the world. I could be accused of bias, considering we share many of the same views on the concept of money within society, but the more we watch economies evolve each day, the more we realise how we view money and our propensity to spend or save, is actually very much driven by human sentiment and social pressures, be it from our neighbour or the data we see in the markets. There is nothing to say that these views are right or wrong, but it is becoming more apparent that the discipline of economics is moving away from linear models and learning to adapt to the uncertain world we live in today.

Written by Dearbhla Gavin

Brian McGoldrick, Head of compliance at Leman Solicitors
Brian McGoldrick, Head of compliance at Leman Solicitors

The Future of Banking and Financial Services Summit took place in The Gibson Hotel, Dublin on April 28th. Held in conjunction with The Sunday Business Post and iQuest events, its attendees represented the full spectrum of financial services, from retail banking to payments to regulatory risk and compliance.

Everyday, we realize the financial services industry is evolving. With the use of technology, movement of capital is becoming more fluid, methods of exchange are changing and as Horyou is harnessing these opportunities with their new social currency “Spotlight”, I was interested to learn from the executives leading this change.  

The morning keynote was delivered by Colm Lyon, CEO of Fire Financial Services who alluded to “The Great Fintech Scramble”, where many financial services companies are racing to capture market share. He was optimistic about the opportunities that lie across the industry for apps and payments services but also cautioned technology evangelists: “It takes a long time and capital to build a fintech business”.

Colm Lyon, CEO of Fire Financial Services
Colm Lyon, CEO of Fire Financial Services
There was some interesting comments made about the legalities of fintech; it’s easy to forget how rapid these changes are but any industry of course still needs to be governed. Dominic Conlon, Head of the Corporate Department at Lehman Solicitors highlighted the fact that archaic laws don’t fit with the constantly evolving nature of cyberspace. “The law doesn’t know about payments”, he said, and Ronan Hughes, Head of European Payments Services at RBS joined him in saying: “inaction is not an option”.

Ronan McGoldrick of Leman Solicitors reiterated how difficult it is to regulate in the area of fintech and the need for collaboration. “Regulators and innovators will need to come together”, he said. So here another one of the founding principles of Horyou was highlighted – collective action.

The afternoon session was centered around how finance will reinvent itself in this era of disruptive innovation. Anthony Watson, President and CEO of Uphold, the world’s fastest growing money platform, said that the Keynesian model of a bank lending according to what it says on their balance sheet is over. “I would be worried if I was a big bank, the industry is changing, they cannot rely on their legacy anymore”, he said.

Watson also made reference to banks and social impact with regard to fees. He said that technology gives us a real chance to democratize the industry and level out the playing field. This reminded me of the potential that Horyou’s Spotlight has, where it can can allow investors who have the capital to give it to impactors who don’t, therefore spreading wealth and ultimately making a positive social impact.

Giuseppe Insalaco, Senior Advisor at Central Bank of Ireland, closed with his personal view on what the future holds for the financial services industry. Emerging trends, he highlighted, were ‘enhanced consumer intelligence’ and ‘razor sharp’ market segmentation. ”Data is the new gold”, he said. As internet users leave their electronic footprint, entrepreneurs harness this data and identify customers’ needs. However, this also makes speed to market critical and intensifies competition.   In his crystal ball analysis, Insalaco predicted crowdfunding coming of age and legitimizing, becoming less social and more business led. He was fearful of the emergence of an arms race in cybersecurity – “A wall is only as good as the next hacker” -, and predicted an escalation of online breaches.

The main takeaways from the event was that fintech brings opportunities and threats to the financial services industry. Customers will always need a place to manage their finances; whether this is in a traditional bank or an online money platform, they will go with whoever offers them the best return. New platforms like Horyou’s Spotlight add yet another layer, offering social returns.

Written by Dearbhla Gavin

Christine Lagarde, Managing Director of the International Monetary Fund.
Christine Lagarde, Managing Director of the International Monetary Fund.

Last weekend, the Indian capital of Delhi played host to a joint conference between the country’s Finance Department and the International Monetary Fund (IMF). The purpose was to examine the current position of India in the world economy and identify ways in which its socioeconomic situation can be improved to keep up with its economic growth.

India is one of the world’s fastest growing large economies and has the youngest, most populous workforce. This sole fact would put India streets ahead of any other country in terms of competitiveness. However, India is still a developing nation and faces huge societal problems such as poor corporate governance, rising inequality and an inefficient health care system.

Melinda Gates, co-chair of the Bill and Melinda Gates Foundation.
Melinda Gates, co-chair of the Bill and Melinda Gates Foundation.
Melinda Gates, co-chair of the Bill and Melinda Gates Foundation, made a speech outlining the foundation’s interest in India’s issues and the foundation’s pledge to help. “Our investments from the philanthropic point of view are focused on the needs in terms of poverty and inequality.” They realize that, although India may have a demographic advantage, economic opportunity must be created for everyone so that the true dynamism of the country can be captured and turned into prosperity for all.

India is 25 years into its structural reforms but statistics show that income inequality has actually worsened in this time. In defense of this, Prime Minister Modi said that “the reforms put in place in 1991 do not reflect the complex, global realities that we have today.”

As we are now globally interconnected, India is affected by volatile markets and capital flows, drops in commodities and geopolitical conflicts, but is it really as equipped as its more developed counterparts to deal with these issues?

At present, India is growing 3 times faster than its advanced neighbours. Nevertheless, this isn’t being translated into returns for the primary and manufacturing sectors because monetary and price policy are incompatible.

Thankfully, it seems that this is ringing home to the current Government. Indian Finance Minister Arun Jaitley said in his address that “India will make a big shift in corporate tax rates to remain competitive.”

Prime Minister of India Narendra Modi
Indian Prime Minister, Narendra Modi.
This will mean big concessions for service focused foreign companies, which will create jobs until the country is able to strengthen agriculture and factories.

This short term easing of monetary policy will at least mobilise the massive population eligible to work and allow them to internalise all of the opportunities that this global, interconnected market brings.

India is at an extremely decisive moment. It has all of the opportunity but also many obstacles. Initiatives such as that put forward by the Bill and Melinda Gates Foundation are essential to begin to fill in the cracks of this fragmented social base.
Voices of change like Horyou are important to bring the country into the global conversation. However, most importantly, multilateral cooperation from those in power is needed so that every person has the best chance of being a productive member of their society and the potential of India as a global growth market, is truly harnessed.

Written by Dearbhla Gavin

Dublin_1

It is a universally established fact that misbehavior in finance and bad judgment in monetary policy were two major catalysts of the world recession that has touched almost every economy over the last few years. Financial institutions are the driving force of an economy; they allow businesses to produce and consumers to spend and so their actions have a very real impact on our lives.

There were times when austerity measures would reinstate reason and measure in that seemingly wild arena but now, technological revolution with the hyper connectivity and infinite openings that it offers, is providing the world of finance with a chance to make a real social impact; and this time, for good.

This is happening right now in Ireland and specifically at Bank of Ireland, in Grand Canal Square, in Belfast, whose Head of Innovation, David Tighe, I met at MoneyConf.

We had an energetic chat on how banking has a real chance to turn its reputation around and start being a facilitator rather than a drain on the economy. He told me how Bank of Ireland has finally acknowledged the impact of start-ups on Ireland’s economic growth, as they are now a core element of their strategy.

Grand_Canal_Square_in-article

To that effect, Bank of Ireland has set up a workbench in its Grand Canal Square branch with plans to expand to the major cities across the country. Put simply, it is a space where start-ups can come any day to work and build their business in an innovative and vibrant environment with free WIFI, free coffee and snacks, a network of like-minded people, and staff to answer all financial questions.

BOI Innovation Hub is completely aligned with Horyou when it comes to the interdisciplinary model as both believe in the power of cross collaboration and sharing of ideas. Diversity should be celebrated and the best results come from convergence of different experiences, thoughts and skills.

I challenged David on the fact that a bank is still a profit seeking institution; so what’s in it really for them? He said that as an enterprise bank, ‘start-ups are our product’. He believes that with the right advice and support, start-ups can grow, create real value and become driving force of growth in the economy.

BOI_startup

I was also happy to hear that along with supporting potentially high return companies, sustainability is key consideration; entrepreneurs are realizing the competitive advantage of long-term servicing. And this is not just about environmental impact; sustainable business is built with a long-term focus in mind, be it environmental or economic.

This is why Bank of Ireland, and hopefully many more institutions, will continue to support start-ups; the end goal of solely financial gain is changing to that of financial gain plus social good. They have society in mind, and we hope that from now on, other banks will too.

By Dearbhla Gavin

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