Payment apps score high for impact, while banks lose points for fossil fuel financing

Earlier this month, I wrote about Impaakt, a Swiss startup that aims to improve the way companies are rated on their impact on people, such as financial inclusion, diversity and job creation, and their impact on the environment. impacts – pollution, water consumption, waste.

It also innovated in the evaluation process, using a small central staff to report on 600 professional contributors from around the world. Their reports are then presented to 50,000 trained volunteer raters who rate companies from +5 to -5 in crowdfunding campaigns.

Solar companies rank high, while mining and oil companies generally score low on environmental impact. Sylvain Massot, co-founder and chief financial officer of Impaakt, explained that some fintechs and companies score highly, but banks tend to lose points for supporting fossil fuel companies.

“The global score for the software and IT services industry is positive, as they primarily provide services that generate very small negative externalities. This is especially true when looking at their operations. For example, we do not include ‘operational waste’ or ‘operational water consumption ’ as a theme for the industry because it’s not a key issue,” he said.

Global Payments was one of the highest-ranked companies at No. 4, behind two solar companies and healthcare leader Illumina, which generates about 90 percent of the world’s genetic sequencing data. But it’s ahead of Moderna, a biotech that makes mRNA for a Covid-19 vaccine.

Global Payments is highly rated because it processes about 8% of contactless payments worldwide, Massot said.

“Additionally, the company has a ‘Social Solutions Analysis’ that describes how they are empowering 3.5 million SMEs through their services.” Additionally, it has a subsidiary, TouchNet, that provides financial management education to college students.

“It provides students with solutions to help them pay, manage and plan for their tuition and other types of payments related to their education.”

Visa also had good results. As the largest player in the card industry, it processed 48.8% of digital transactions. Impact says its service helps small and medium-sized businesses. Visa also provides financial services to the approximately 500 million underbanked people around the world.

Two insurers, Generali and Zurich, also did well. They have a low impact on the environment and provide peace of mind and well-being to their clients.

“The community also commends both companies for their role in empowering SMEs and individuals, making them more resilient to economic hardship and protecting them from extreme climate events. For example: “Generali 116,000 in 2020-21 SMEs provided financial assistance and set up digital tools for 1,700,000 SMEs,” said the report. Impact added that Zurich’s Flood Alliance had helped 225,000 people.

Several global banks scored poorly, often because they financed the fossil fuel industry or money laundering or both. Credit Suisse scored points for funding the economy, but lost points for its $74 billion in donations to fossil fuel companies and its failure to prevent corrupt and illegal practices such as money laundering. HSBC has been criticized for $42 billion in fossil fuel financing as well as multiple bribery, money laundering, data security breaches and financial excesses through credit card issuance and predatory lending.

The situation at Crédit Agricole is much the same. For every $1 Crédit Agricole spends on renewable energy products, it spends $4 on fossil fuel companies, causing them to continue to generate large amounts of GHC (greenhouse gas) emissions that contribute to global warming, Massot said.

He added that the structure of Impaakt’s rating system takes energy companies such as Exxon into account.

“We focus on both the negative aspects of producing fossil fuels, such as pollution, greenhouse gas emissions, and the positive aspects – providing the planet with essential energy and petrochemicals,” he said.

“At the end of the day, our assessment of the importance of the various impacts – how big or small they are – what’s really interesting is that we take into account all the impacts, whether they’re positive or negative. But the overall score is what the community assigns to each The result of weighting these effects by the importance of the subject. It differs from all other methods, which rely on arbitrary weighting decisions made by individuals sitting in offices in Geneva or New York.”

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